[Federal Register Volume 81, Number 218 (Thursday, November 10, 2016)]
[Notices]
[Pages 79188-79222]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27120]
[[Page 79187]]
Vol. 81
Thursday,
No. 218
November 10, 2016
Part III
Department of Justice
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Drug Enforcement Administration
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Jones Total Health Care Pharmacy, L.L.C., and SND Health Care, L.L.C.;
Decision and Order; Notice
Federal Register / Vol. 81 , No. 218 / Thursday, November 10, 2016 /
Notices
[[Page 79188]]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 15-2]
Jones Total Health Care Pharmacy, L.L.C., and SND Health Care,
L.L.C.; Decision and Order
On April 29, 2015, Administrative Law Judge Gail A. Randall
(hereinafter, ALJ) issued the attached Recommended Decision.\1\
Therein, the ALJ found that ``Respondents violated recordkeeping
requirements by failing to record whether Jones Pharmacy's biennial
inventory was taken at the opening or close of business, and by failing
to indicate the number of tablets per opened commercial container, the
number of tablets shipped in each commercial container, and the number
of commercial containers that [were] on hand.'' R.D. at 59 (citing 21
CFR 1304.11(e)(3)).
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\1\ All citations to the Recommended Decision are to the slip
opinion as issued by the ALJ.
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Most significantly, the ALJ further found that Respondent's (Jones
Pharmacy) pharmacists dispensed controlled substance prescriptions in
violation of their corresponding responsibility, see id. at 60-64,
pursuant to which it is a violation of federal law for a pharmacist to
knowingly dispense a controlled substance prescription which was not
``issued for a legitimate medical purpose by a practitioner acting in
the usual course of professional practice.'' 21 CFR 1306.04(a). The ALJ
credited the testimony of the Government's Expert that the
prescriptions presented various red flags, i.e., indicia that the
prescriptions were not issued for a legitimate medical purpose. These
included that: (1) The patients were traveling long distances (and many
came from out-of-state) to obtain the prescriptions; (2) that the
patients were prescribed cocktails which included narcotics such as
oxycodone, benzodiazepines such as Xanax (alprazolam), and muscle
relaxants such as Soma (carisoprodol) which were known to be highly
abused; (3) that on some occasions, two patients came from the same
out-of-state location and presented identical or nearly identical
prescriptions; (4) that purported pain patients presented only
prescriptions for short-acting but not long-acting narcotics; and (5)
that the patients paid for their prescriptions with cash. Id. at 61-62.
The ALJ further credited the testimony of the Government's Expert in
pharmacy practice that the red flags presented by many of the
prescriptions could not be resolved by the pharmacists. Id. at 64.
The ALJ specifically rejected Respondent's contention that its
owner (Ms. Cherese Jones) was simply na[iuml]ve or unaware of various
indicia (otherwise known as red flags) that the prescriptions her
pharmacy filled lacked a legitimate medical purpose as well as its
contention that during the relevant time period, Florida pharmacists
were generally ``unaware of the . . . concept of `red flags.' '' R.D.
at 66-69. The ALJ was unpersuaded by the testimony of Respondent's
Expert that pharmacists were generally unaware of the concept of red
flags during the relevant time period, noting that while Respondent's
Expert claimed to have based her opinion on a review of the Agency's
administrative decisions, those decisions contradicted her testimony.
Id. at 68-69.
Finding that the Government met its burden of proof, the ALJ then
addressed whether Respondent had put forward sufficient evidence to
show why it could be entrusted with a registration. The ALJ
specifically found that Ms. Jones had ``carefully avoided any admission
that she failed to exercise her corresponding responsibility'' and that
her ``wavering responses on cross-examination undoubtedly show her lack
of understanding of a pharmacist's corresponding responsibility.'' R.D.
71-72 & n.27. Based on her conclusion that Ms. Jones ``had not accepted
responsibility for the unlawful dispensing that occurred at''
Respondent, the ALJ declined to consider Respondent's testimony
regarding its remedial efforts. Id. at 73. And while finding that Jones
Pharmacy and SND Healthcare ``are separate entities,'' id., the ALJ
found that Ms. Jones was the owner and operator of both entities and
that ``there is no dispute that SND Healthcare and Jones Pharmacy are
one integrated enterprise.'' Id. at 74. The ALJ thus ``conclude[d] that
the unlawful dispensing practices at Jones . . . Pharmacy, L.L.C., are
an appropriate basis to deny the pending application'' of SND
Healthcare for a registration. Id. The ALJ thus recommended that I
revoke Jones Pharmacy's registration and deny any pending application
by Jones to renew or modify its registration. Id. at 75. With respect
to SND Healthcare, the ALJ recommended that I deny its pending
application.
Respondent filed Exceptions to the ALJ's Recommended Decision and
the Government filed a Response to Respondent's Exceptions. Thereafter,
the record was forwarded to me for Final Agency Action.
Having considered the record in its entirety including Respondent's
Exceptions, I find that while several of its contentions with respect
to the ALJ's factual findings are not without merit, I adopt the ALJ's
credibility findings and conclude that most of the ALJ's factual
findings are supported by a preponderance of the evidence. I further
conclude that the ALJ's factual findings support her legal conclusions
that: (1) Respondent's pharmacists dispensed numerous controlled
substance prescriptions in violation of the Agency's corresponding
responsibility rule, see 21 CFR 1306.04(a); (2) Respondent has not
accepted responsibility for its misconduct; and (3) that there is
sufficient overlap in the ownership and control of Jones Pharmacy and
SND Healthcare such that Jones' misconduct supports the denial of SND's
application.\2\
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\2\ I also adopt the ALJ's conclusion that Respondent Jones
Pharmacy's inventories were non-compliant with DEA regulations. R.D.
59-60.
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Accordingly, I adopt the ALJ's legal conclusions, as well as her
implicit conclusions that granting Jones' renewal application and SND's
application ``would be inconsistent with the public interest.'' \3\ 21
U.S.C. Sec. 823(f). I will therefore also adopt the ALJ's
recommendations that I deny Jones Total Health's renewal application
and SND's pending application. A discussion of Respondent's Exceptions
follows.
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\3\ While the ALJ also recommended that I revoke Jones Total
Health Pharmacy's registration, R.D. at 75, I take official notice
of the Agency's registration records which show that Jones did not
submit a renewal application until December 30, 2015, the day before
its registration was due to expire. Because Jones had previously
been issued the Show Cause Order, to continue its registration past
the expiration date, it was required to file its renewal application
``at least 45 days before the date on which [its] existing
registration [was] due to expire.'' 21 CFR 1301.36(i). Respondent
did not seek to continue its registration past the expiration date,
and based on the evidence in this record, I find that extension of
its registration was not ``consistent with the public health and
safety.'' Id. I therefore find that Jones Total Health Pharmacy's
registration expired on December 31, 2015. See, e.g., Ralph J.
Chambers, 79 FR 4962, 4962 (2014); Paul H. Volkman, 73 FR 30630,
30641 (2008). However, Jones Total Health Pharmacy's application
does remain pending before the Agency. Respondent may dispute this
finding (as well as any other finding which is the subject of
official notice) by filing a properly supported motion within ten
days of the date of this Order. 5 U.S.C. Sec. 556(e).
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Exceptions to the ALJ's Findings of Fact
Exceptions to Findings Related to the DOH Inspection
Respondent first takes exception to several of the factual findings
made by the ALJ with respect to the June 2012 inspection which was
conducted by the Florida Department of Health (DOH).
[[Page 79189]]
Exceptions, at 3-7. Specifically, Respondent excepts to the ALJ's
finding (FoF #69) that during the inspection, the DOH Inspector (who
testified at the hearing) ``found that the majority of [its] business
was the sale of controlled substances, which the pharmacy was filling
for cash and that very little business was for non-controlled
substances.'' Id. Respondent argues that ``[t]his finding is erroneous
and contradicted by the record.'' Id.
While Respondent argues ``that objective evidence contradicts [the
inspector's] testimony,'' the ALJ found the Inspector's testimony
credible and the Government produced a second page of the Inspection
report on which the Inspector listed ``Additional Remarks'' and stated
in part:
Inspection reveals that the pharmacy fills mostly CII narcotics.
They are charging $9.00 per tablet for Oxycodone 30 mg or $1620/180.
CII dispensing is cash though they take insurance for other
medications. Profits on the CII run between $2,000 and $6600 per
day. The non-controls are mostly filler RXs and some HIV meds filled
with insurance. Profit on the non-controls are [sic] usually less
than $200/day, often less than $50/day. The primary business of the
pharmacy is the cash sale of narcotics. The total number of
prescriptions filled daily is extremely low.
GX 12, at 2.
Respondent asserts that the Inspector's testimony that this page of
the report ``was created at the time of such inspection is not
credible'' because it ``was never shown to Ms. Jones, [and] was . . .
[n]ever signed by Ms. Jones'' during the inspection. Exceptions, at 4.
Respondent further argues that ``[t]he fact that [the DOH Inspector]
never shared page 2 . . . with Ms. Jones contradicts her testimony that
if she saw things that a pharmacist was doing wrong, she would tell''
the pharmacist. Id. Respondent ignores, however, that the Inspector
testified that the notes on page two were created so that the inspector
on any subsequent inspection ``would know what to look for.'' Tr. 166.
The Inspector also explained that her comments about Respondent's
dispensing of narcotics were not placed on the first page of the
inspection form because ``[w]e had had complaints about us putting
things about narcotics on the front of an inspection, because people
hang them, so we were told to put them on another page.'' Id. at 165-
66.\4\
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\4\ Respondent also argues that the Inspector's failure to
provide page 2 to Ms. Jones violated Florida DOH's ``Licensee Bill
of Rights, which . . . requires that a pharmacy be presented for
review . . . all inspection reports at the time of the inspection.''
Exceptions, at 4. Even if the Inspector's failure to provide this
page to Ms. Jones violated the State's Licensee Bill of Rights,
Respondent cites no authority pursuant to which the document would
be rendered inadmissible in either administrative or judicial
proceedings, and even if there is such authority, it would not be
controlling in this proceeding.
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However, even if page 2 of the report was not shown to Ms. Jones, I
find no reason to reject the Inspector's testimony that she made the
notes based on her observations during the inspection she conducted on
June 7, 2012. Id. at 165-67.
Respondent further attempts to question the validity of page two of
the report. It asserts that the DOH Inspector ``testified that the date
field on the top of the document could not be altered on reports after
they are finalized.'' Exceptions, at 5. Respondent then notes that the
``[t]he report marked as Respondents' Exhibit 8 [at p. 5] contains a
typewritten data field, while the'' first page of the report submitted
by the Government ``contains a blank in the date field next to Ms.
Jones' signature.'' Id. Respondent then maintains that ``[t]his appears
to contradict testimony than any date field on the report cannot be
changed or manipulated and creates further doubt that page 2 . . . was
created contemporaneous to the June 7, 2012 inspection.'' Id.
Respondent, however, failed to cite to the portion of the
transcript which purportedly contains this testimony. See id. While
this is reason alone to reject its contention, see 21 CFR
1316.66(a),\5\ Respondent ignores that the blank date field next to Ms.
Jones' signature is located at the bottom of the page and not ``on the
top of the document.'' Thus, I find no reason to reject the testimony
of the Inspector regarding when she created the document.
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\5\ This regulation provides that ``[t]he party shall include a
statement of supporting reasons for such exceptions, together with
evidence of record (including specific and complete citations of the
pages of the transcript and exhibits) . . .''
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Respondent also argues that the Inspector's testimony and the
report's statement that ``the majority of Jones' Pharmacy's business
was the sale of schedule II controlled substances . . . is inconsistent
with the objective evidence.'' Exceptions, at 5. Putting aside that the
report actually used the word ``primary'' rather than ``majority'' to
describe the nature of Respondent's business, I find the contention
unavailing. While Respondent points to data showing that during 2012,
Respondent ``made a gross profit of $58,123 on sales of non-controlled
substances'' and notes that it filled ``over 2,956 prescriptions'' for
non-controlled drugs and filled ``only 769 prescriptions'' for
controlled substances, id. at 5-6, Respondent ignores that its own
prescription log report for the year shows that its gross profit on its
sales of controlled substances was $316,942.\6\ RX 17, at 19. Thus, the
objective evidence shows that in terms of Respondent's gross profit,
its primary business during 2012 was the sale of controlled substances.
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\6\ So too, the data for Respondent's previous years in business
(2010 and 2011) supports the view that its primary business was the
sale of controlled substances. Specifically, in 2010, it dispensed
1847 controlled substance prescriptions and had a gross profit on
these of $530,483. RX 13, at 40. By contrast, during 2010, it
dispensed a total of 1072 prescriptions (including refills) for non-
controlled drugs and had a gross profit of only $10,189 on these
dispensings. RX 14, at 25. And while during 2011, the number of non-
controlled prescriptions (including refills) it filled (3053)
clearly overtook the number of controlled prescriptions it filled
(1093), its gross profit on controlled substances was $439,990, more
than 11 times its gross profit of $38,242 on the non-controlled
drugs it sold. Compare RX 15, at 25, with RX 16, at 66.
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Respondent also takes issue with the ALJ's crediting of the DOH
Inspector's ``annotation in her report that [Respondent] sold a 180
pill prescription for $1620, when [in the Inspector's] opinion the more
reasonable price to pay was $200 to $250.'' Exceptions, at 6 (citing
ALJ FoF #70). While it is unclear whether Respondent is challenging the
Inspector's annotation as to the price Respondent was charging at the
time of the inspection or what the Inspector testified as being the
``more reasonable price,'' or both, the ``objective evidence'' shows
that in this time period, Respondent was, in fact, charging $1620 for
180 dosage units of oxycodone 30. See GX 23, at 5 (RX for 180
Roxicodone 30 issued on July 2, 2102 and dispensed the same day as
oxycodone 30 \7\ for $1620 cash); see also GX 24, at 11-14 (Rxs for 180
oxycodone 30 dispensed on May 29, 2012 and June 26, 2012, each for
$1620 cash).
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\7\ Of note, the prescription label lists the National Drug Code
number of 0406-8530-01. GX 23, at 5. I take official notice that,
according to the FDA's National Drug Code Directory website, this is
the drug code for generic oxycodone 30 mg tablets marketed by
Mallinckrodt, Inc. Respondent may refute this finding by filing a
properly supported motion within ten (10) days of the date of this
Decision and Order.
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Respondent further argues that the DOH Inspector ``conceded on
cross-examination that she had no basis to know what an appropriate
mark-up would be'' and her ``testimony in this regard should have been
rejected.'' Exceptions, at 6 (citing Tr. 136). However, Respondent
wrongly attributes this testimony to the DOH Inspector rather than the
Supervisory Diversion Investigator who provided it. See Tr. 136.
As for the DOH's Inspector's testimony that a ``more reasonable
[[Page 79190]]
price'' to pay for a 180 oxycodone 30 prescription was $200 to $250, it
is true that she testified that did not know what price Respondent was
paying for oxycodone in June 2012. Id. at 183. She also testified that
she did not prepare a written analysis of the prevailing prices being
charged for controlled substances during the period of February 2010
through July 2012. Id. at 181. However, the Inspector also testified
that, based on her ``experience as an inspector of pharmacies \8\ in
the same area as [Respondent] on or around that time,'' ``less than
$200'' and ``at most $250'' was a more typical price for 180 dosage
units of oxycodone 30. Id. at 168. Notwithstanding that the Inspector
did not know what price Respondent was paying for oxycodone and did not
prepare a written report, based on her experience as a pharmacy
inspector, she was clearly competent to testify as to the prices being
charged by other pharmacies for 180 dosage units of oxycodone 30. See
also Tr. 161-62 (Inspector's testimony that in determining whether
pharmacies are filling legitimate controlled substances she looks at
the prices being charged). I thus reject Respondent's contention on
this issue as well.
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\8\ The DOH Inspector had previously worked as a pharmacist for
33 years. Tr. 161. She also testified that in the three and a half
years that she has been a DOH Inspector, she had inspected ``[c]lose
to 1,500'' pharmacies in the Dade and Broward County areas. Id. at
160.
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Next, Respondent argues that ``[t]he ALJ incorrectly found based on
[GX] 14 that sales of controlled substances were in the top ten
products that [Respondent] sold from January 1, 2010 through August 29,
2014.'' Exceptions, at 6 (citing FOF # 72). Respondent contends that
``[t]he finding was erroneous and misleading because [the Exhibit] was
an aggregate report of [its dispensing] for multiple years.'' Id.
The ALJ's finding was neither erroneous nor misleading as it
specifically stated that this ``report indicated that controlled
substances were in the top 10 products that [Respondent] sold from
January 1, 2010 to August 29, 2014.'' R.D. at 15 (emphasis added). And
even crediting Respondent's evidence that shows that after 2010, the
number of non-controlled prescriptions it dispensed ``far exceeded the
number of controlled'' prescriptions that were dispensed, the evidence
is what it is--a report of the dispensings during that time period. I
thus reject Respondent's challenge to this finding.
Respondent also challenges the ALJ's finding that ``[d]uring the
four inspections conducted by the [DOH], [Respondent's] dispensing and
corresponding responsibilities were discussed.'' Exceptions, at 7
(citing FOF #76). Respondent maintains that ``only two of the reports
shown to Ms. Jones could be argued to relate to [the] corresponding
responsibility--the reports of May 14, 2014 and August 29, 2014.'' Id.
Respondent discounts the inspection of April 14, 2011, during which the
Inspector noted on the report (a copy of which was provided to
Respondent's representative) that:
[t]his pharmacy is filling and dispensing what appears to be a
large amount of Schedule II Controlled Substance[[hairsp]] written
prescriptions, especially for OXYCODONE Tablets, from patients whose
home addresses are in Ohio, Kentucky, Tennessee, Connecticut,
Indiana, Georgia, Massachusetts, South Carolina, New Jersey, West
Virginia, New Hampshire, as well as from out of area locations in
Florida such as Panama City, Fernandina Beach, Kissimmee, Sanford,
Orange Park, Gainesville, Crestview, Port Orange, Daytona Beach, St.
Cloud, Wesley Chapel, and Tavares.
GX 13, at 1.
In Respondent's view, this report apparently does not establish
that the corresponding responsibility was discussed at the inspection
because Respondent ``ceased filling prescriptions for out-of-state
residents on April 1, 2011.'' Exceptions, at 7 n.8. Respondent ignores,
however, that the Inspector's concerns were not limited to the
oxycodone prescriptions dispensed to persons who came from other States
and included the prescriptions it dispensed to Florida residents who
came from out-of-area. Thus, even if the Inspector's remarks did not
specifically use the words ``corresponding responsibility,'' the
remarks nonetheless put Respondent on notice that the Inspector was
concerned about whether it was dispensing legitimate prescriptions.
In any event, the Agency's corresponding responsibility rule has
been in force for decades and numerous decisions of both the courts and
the Agency have provided ample guidance as to the scope of a
pharmacist's duty under the rule. See, e.g., Medicine Shoppe-
Jonesborough v. DEA, 300 Fed. Appx. 409, 412 (6th Cir. 2008); United
States v. Henry, 727 F.2d 1373, 1378-79 (5th Cir. 1984); United States
v. Seelig, 622 F.2d 207 (6th Cir. 1980); United States v. Hayes, 595
F.2d 258 (5th Cir. 1979); see also Frank's Corner Pharmacy, 60 FR 17574
(1995); Medic-Aid Pharmacy, 55 FR 30043 (1990); Ralph J. Bertolino, 55
FR 4729 (1990). Having obtained a DEA registration and commenced
dispensing controlled substance prescriptions, Respondent's pharmacists
were obligated to not fill prescriptions when they either knew or were
willfully blind to the fact that the prescriptions lacked a legitimate
medical purpose. 21 CFR 1306.04(a). Thus, it is irrelevant whether the
DOH Inspectors discussed with Respondent's pharmacists their
obligations under the Agency's corresponding responsibility rule.
Exceptions to Findings Regarding the 2013 DEA Inspection
Respondent asserts that ``[t]he ALJ's finding of fact that
[Respondent's] inventory only indicated the name of the controlled
substances, the strength of the controlled substances, the quantity,
and `one' of the NDC number was also erroneous.'' Exceptions, at 8
(citing FOF #84). The ALJ's Finding of Fact No. 84 stated:
DI Gonzales also noted that Ms. Jones' biennial inventory was
missing some of the required information. The inventory was supposed
to indicate amounts of finished form in each container and the
amount of commercial bottles that she had on hand during her
inventory. Ms. Jones' inventory only indicated the name of the
controlled substances, the strength of the controlled substances,
the quantity, and one of the NDC numbers.
R.D. at 17-18 (citing Tr. 35). According to Respondent, this finding
was erroneous because the evidence ``reflect[s] [that] the entire NDC
number for the particular strength was listed on the biennial
inventories not just `one' of the NDC numbers.'' Exceptions, at 8
(citing Tr. 472-73; 687; GX 5).
To be sure, the DI actually testified that Ms. Jones ``only listed
the name of the controlled substances, the strength of it, the
quantity, and I believe on one of them the NDC number,'' Tr. 35, thus
suggesting that the ALJ misread the testimony. Nonetheless, the
Agency's regulation which sets forth the information which must be
included on a pharmacy's inventory does not require that the pharmacy
list the NDC number for any drug. See 21 CFR 1304.11(e)(3) (requiring
that a dispenser's inventory include ``the same information required of
manufacturers pursuant to paragraphs (e)(1)(iii) and (iv) of this
section,'' which does not include the NDC number). As Respondent was
not required to list any NDC number, to the extent the finding
erroneously states that the inventory ``only indicated . . . one of the
NDC numbers,'' it is immaterial.
What is material is that the inventories were missing required
information. Specifically, the inventory was required to include
``[t]he number of units or volume of each finished form in each
commercial container (e.g., 100-tablet bottle or 3-milliliter vial);
and
[[Page 79191]]
[t]he number of commercial containers of each such finished form (e.g.,
four 100-tablet bottles or six 3-milliliter vials).'' Id. Sec.
1304.11(e)(1)(iii)(C) & (D). Neither Respondent's November 3, 2011
inventory nor its April 13, 2013 inventory listed this information. See
GX 5, at 1-14; Tr. 34-36, 38. Moreover, neither inventory indicated
whether it was ``taken either as of the opening of business or as of
the close of business on the inventory date'' as required by 21 CFR
1304.11(a). Tr. 36, 38.
Respondent nonetheless argues that Ms. Jones provided ``unrebutted
testimony . . . that the last two digits of the NDC number represent
the bottle size of the medication (i.e., the number of tablets per
bottle).'' Exceptions, at 8. Respondent further asserts that when it
fills prescriptions, it uses ``the contents of open containers first,
before opening another closed container of the same controlled
substance,'' and thus, ``while the biennial inventory did not contain a
column for the number of containers, that number was easily derived
from the information on . . . the biennial inventory.'' Id. Respondent
then contends that ``any factual finding that the DEA was unaware of
the number of containers of controlled substances on hand is simply an
argument of form over substance.'' Id. at 8-9.
This argument does not, however, establish that the ALJ's factual
findings as to what information was missing from the inventory were not
supported by substantial evidence. Rather, it is an argument which goes
to the weight to be given to the violations. With the exception of the
discussion in Finding of Fact No. 84 that the inventories contained
just ``one NDC'' number, I find that the rest of the ALJ's findings as
to what required information was missing from the inventories are
supported by substantial evidence.
Respondent also takes exception to the ALJ's Finding of Fact No.
91, which was based on the testimony of a Diversion Investigator, that
upon reviewing Respondent's electronic schedule II orders forms (DEA
E222 forms), he found ``480 line items that were done incorrectly.''
\9\ Exceptions, at 9 (quoting R.D. 19, FOF #91). Respondent submits
that this finding is erroneous, because while the DI ``testified to
this, . . . DEA . . . bears the burden of proof [and] provided no
independent evidence of the 480 line items that were allegedly
inappropriate.'' Id.
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\9\ Prior to testifying as to the number of line items that were
done incorrectly, the DI testified regarding several E222 order
forms that were submitted for the record, noting that the forms
``did not indicate how many packages Ms. Jones received or the date
that she received the ordered packages.'' Tr. 39-43; see also GX 6.
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According to the DI, these E222 forms were not properly completed
because while the distributor shipped the orders, Respondent's owner
did not go back online and ``input[[hairsp]] how many packages she
received or the date she received them.'' Tr. 43. The Government also
introduced various records showing several instances in which this
occurred. GX 6, at 1-2; 3-5.
As evidenced by her factual finding, the ALJ clearly found credible
the DI's testimony as to the number of line items that were not
properly completed. Contrary to Respondent's contention, the DI's
testimony alone provides substantial evidence to support these
violations. I therefore reject this contention.
Exceptions to the Testimony of the Government's Expert
Respondent challenges several of the ALJ's factual findings that
are based on the Government's Expert's testimony regarding a
pharmacist's obligations in dispensing controlled substance
prescriptions, and that in 2010, Florida pharmacists were generally
aware of various red flags of abuse and diversion. R.D. 22-31; Tr. 240.
First, Respondent challenges the ALJ's finding that ``[i]n her role as
a retail pharmacist, [the Expert] interacted frequently with other
pharmacists in the area.'' R.D. 23, FOF #108 (citing Tr. 216) (cited in
Exceptions, at 9-10). Respondent contends that the ALJ should not have
credited this testimony because ``[o]n cross-examination it became
clear that [the Expert] could not identify any specific pharmacist she
had talked to regarding the particular issues.'' Exceptions, at 10.
However, the ALJ specifically addressed this portion of the Expert's
testimony and while she noted that the Expert became hostile, the ALJ
nonetheless found the Expert's testimony credible based on her years of
experience. R.D. 24 n.13. Because the ALJ was in the best position to
observe the Expert's testimony, and her testimony is not inherently
implausible or inconsistent, I find no reason to reject the ALJ's
credibility finding.
Next, Respondent challenges the ALJ's factual finding No. 113,
which was based on the Expert's testimony that in determining whether a
controlled substance prescription is issued for a legitimate medical
purpose, one of ``the biggest [signs] is when a patient asks you not to
bill their insurance company and to pay cash for the prescription.''
Tr. 226; see also R.D. at 24; Exceptions, at 10. According to
Respondent, ``[t]his finding is erroneous as the record is devoid of
any evidence that anyone associated with the prescriptions at issue or
otherwise, paid cash and simultaneously requested that [Respondent] not
bill their insurance.'' Exceptions, at 10.
While it is true that there is no evidence in the record that any
particular patients asked Respondent's pharmacists not to bill their
insurance for the prescriptions, that does not render the finding
erroneous. Indeed, other testimony, which stands unrefuted, is that
drug seekers are willing to pay high prices in cash to obtain
controlled substances and that ``[o]ften the addicts will sell part of
their prescription in order to pay this exorbitant amount of money \10\
for the prescription. So they take some and they sell some.'' Tr. 170.
Moreover, a Supervisory Diversion Investigator, with 35 years of
experience as a Diversion Investigator, testified that ``paying cash''
is a ``red flag[[hairsp]] of diversion.'' Tr. 124. This witness further
testified that:
\10\ This testimony was provided by the DOH Inspector in
reference to the $1,620 price for 180 oxycodone 30 which Respondent
was charging at the time of the June 2012 inspection. See generally
Tr. 165-67.
Normally people pay with insurance. And these type of narcotics
don't cost that much money, so that is usually an indication that
the patient and the pharmacist know that these drugs are going to be
diverted, that they'd be willing to pay more than $1,000 for one
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prescription, for instance.
Id. at 125. See also id. at 33 (testimony of DI that upon review of
Respondent's schedule II prescriptions, ``we started discussing what we
call as red flags, which a majority of [the prescriptions] were for
Oxycodone 30 milligram . . . . And then we also noticed that they were
all being paid for in cash.''); id. at 51 (DI's testimony that upon
reviewing the dispensing records, one of the concerns was that ``a
majority of the prescriptions were being paid [for] by cash.'').
The evidence further shows that 93 percent of the controlled
substance prescriptions dispensed by Respondent from February 15, 2010
through July 3, 2012 were paid for with cash or cash equivalents. Tr.
57; see also GX 2 (spreadsheet of the controlled substance
prescriptions showing, inter alia, the method of payment). The
Government's Expert testified that in her experience, ``only . . .
maybe five percent of the patients pay cash,'' Tr. 285, a figure which
is consistent with other evidence provided by the Government,
specifically, an April 2012 report prepared by the IMS Institute for
Healthcare Informatics, which, based on
[[Page 79192]]
its National Prescription Audit, found that out of 4.024 billion
prescriptions dispensed during 2011, cash was the method of payment for
only 258 million prescriptions or 6.4 percent. GX 29, at 42.
Respondent takes issue with the ALJ's having allowed the
Government's Expert ``to testify about the . . . report.'' Exceptions,
at 11. It argues that the Government's Expert ``had no personal
knowledge to how the report was compiled and the report was not
reflective of the South Florida community [sic] which [Respondent] was
located.'' Id. Respondent also argues that the report ``did not address
the record evidence that Florida had one of the highest uninsured rates
for individuals.'' Id.
While Respondent is correct that the Government's Expert did not
have personal knowledge as to how the report was compiled and the
report does reflect nationwide data, Respondent ignores that the Expert
testified that in her experience, which includes 17 years as a retail
pharmacist and a substantial period working at pharmacies in Broward
and Dade County, only five percent of patients pay cash for their
prescriptions. Respondent also ignores that its Expert agreed that six
percent was an accurate figure for the nationwide average.
Moreover, while Respondent produced a Census Bureau Report which
shows that in 2012, 20.1 percent of Floridians did not have what the
Census Bureau defines as ``comprehensive health insurance'' coverage,
the Report clearly stated that ``[t]his definition excluded single
service plans, such as accident, disability, dental, vision or
prescription medicine.'' RX 33, at 7, 24. Thus, the actual percentage
of persons lacking insurance covering their prescriptions is likely
less than the 20.1 percent figure.\11\ Moreover, even ignoring that 49
percent of the prescriptions in GX 2 were filled for out-of-state
customers, there is still a wide disparity between the percentage of
prescriptions that were paid for with cash and what one would expect
based on the Census Bureau's figure regarding the percentage of
uninsured Floridians.
---------------------------------------------------------------------------
\11\ Respondent also produced a reprint of an article from the
Kaiser Health News which was attributed to the Miami Herald; the
article states that Broward County's uninsured rate was 26 percent
and was purportedly based on census data. RX 33, at 1. However, this
document is hearsay and actually contains hearsay within hearsay. In
contrast to the figure provided in the IMS Report, which has been
corroborated by both the Government's and Respondent's experts,
Respondent has made no showing to establish the reliability of the
statements in the Miami Herald article. See J.A.M. Builders v OSHA,
233 F.3d 1350 (2000). Nor is there any tradition of courts accepting
newspaper articles as reliable evidence of the statements contained
in them.
---------------------------------------------------------------------------
Finally, Respondent takes exception to the ALJ's crediting the
Government Expert's ``testimony that `a pharmacist could also go to the
[DOH's] website and lookup the prescriber's specialty.' '' Exceptions,
at 10 (citing FOF #115). According to Respondent, the Government's
Expert ``was impeached'' on cross-examination ``and conceded that with
regard to the cited example the DOH website only lists the training
that a particular physician had and not necessarily their area of
expertise.'' Id. at 10-11 (citing Tr. 339).
To be sure, in this portion of the transcript, Respondent's counsel
questioned the Government's Expert about a physician whose profile
showed that he had done a residency in pediatrics but did not list any
specialty certification. See GX 35, at 3. However, the DOH profiles for
other physicians do include their ``certifications from specialty
boards recognized by the Florida board which regulates the profession
for which he/she is licensed.'' GX 36, at 2-3 (profile of Dr. S.K.
showing that he was board certified in ``Family Practice'' by the
``American Board of Family Medicine.''); see also, e.g., GX 37, at 2-3
(profile of Dr. J.F. showing that he was board certified in ``Family
Practice'' by the ``American Osteopathic Board of Family
Phy[sicians]''); GX 38, at 2-3 (profile of Dr. R.T. showing that he was
board certified in ``Obstetrics and Gynecology'' by the ``American
Board of Obstetrics & Gynecolog[y]''); GX 42, at 2-3 (profile of Dr.
R.W. showing that he was board certified in ``Emergency Medicine'' and
``Internal Medicine'' by the American Boards of Emergency Medicine and
Internal Medicine).
Moreover, many of the prescriptions in the record also listed the
prescriber's NPI (National Provider Identifier) number and the
Government's Expert provided unrefuted testimony that a pharmacist can
use an NPI number and look up a physician's specialty. Tr. 228.
Notably, Respondent did not take exception to this portion of the ALJ's
factual finding number 115. See Exceptions, at 10.
Respondent also argues that the Government's Expert acknowledged on
cross-examination that the prescriptions contained, in the words of
Respondent's counsel, ``no indication that a doctor is practicing
within any particular scope,'' Tr. 337, and that ``there is no
prohibition in the medical field [against] a physician writing a
prescription for a particular drug regardless of the area in which they
may specialize.'' Exceptions, at 11 (citing Tr. 337, 339). As for the
first concession, while it is true that the prescriptions typically did
not list the doctor's specialty, the Government's Expert provided
testimony which the ALJ found credible that it is important for a
pharmacist to know the scope of the physician's practice because a
doctor's deviation from his specialty ``could indicate a possible red
flag.'' R.D. 25 (FOF# 115). So too, even assuming that in Florida, a
physician is not prohibited from prescribing a particular drug
regardless of the area in which he/she specializes, certainly when
physicians issue prescriptions for large quantities of highly abused
controlled substances such as oxycodone 30, alprazolam 2, and in many
cases carisoprodol, and these drugs are not usually prescribed by
physicians with a particular specialty, there is a compelling reason to
question the legitimacy of the prescription. I thus reject Respondent's
challenges to the testimony of the Government's Expert.\12\
---------------------------------------------------------------------------
\12\ For the same reason, I reject Respondent's Exceptions to
the ALJ Factual Findings Nos. 128 and 130. As for Finding No. 128,
it discussed prescriptions written by one Dr. K., who was affiliated
with ``The Pain Center of Broward,'' for D.T., a male patient whose
address was in West Virginia. Exceptions, at 13. Specifically, Dr.
K. prescribed 107 du of oxycodone 30, 41 du of oxycodone 15, and 30
alprazolam 2mg, which D.T. filled at Respondent paying $791 in cash
for the drugs. GX 48.
While Respondent argues that the Government presented no
evidence concerning Dr. K.'s ``then current practice area,'' the DOH
website shows that he was board certified in Obstetrics and
Gynecology. See GX 40, at 4. And even though the prescription did
not indicate that Dr. K. was practicing in an area different than
his specialty, the Government's Expert provided credible testimony
that a pharmacist needs to know a prescriber's practice area when
evaluating whether a controlled substance prescription has been
issued for a legitimate medical purpose. Indeed, the circumstances
attendant with D.T.'s prescriptions provided compelling evidence
that the prescriptions lacked a legitimate medical purpose and
should have prompted additional investigation into Dr. K.'s
background.
---------------------------------------------------------------------------
Exceptions to ``Alleged Red Flags Within Jones Pharmacy's
Prescriptions''
Next, Respondent argues that the ALJ erred in finding that
Respondent ``filled prescriptions for patients that `traveled from
North Carolina to see doctors in Deerfield Beach.' '' Exceptions, at 12
(quoting R.D. 28, FOF # 123 and citing GXs 16 and 44). Respondent
argues that ``there was no evidence in the record that any particular
patients travelled from North Carolina'' and that the Government
provided ``no evidence that such individuals had traveled to Florida
for the purposes of obtaining the prescription as opposed to already
staying in Florida for an extended period of time.'' Id. Continuing,
Respondent maintains that ``[t]he only
[[Page 79193]]
evidence in the record concerning these individuals [sic] residence was
the fact that the individuals presented licenses from the State of
North Carolina.'' Id.
With respect to these two patients (L.S. and J.S.), whose driver's
licenses showed that they had the same last name and resided at the
same residence in Charlotte, North Carolina, the prescriptions they
presented raised numerous other red flags. Specifically, each of these
individuals went to the same pain clinic in Deerfield Beach and
obtained prescriptions for large quantities of oxycodone and alprazolam
that were frequently identical and paid approximately $500 to $600 in
cash (or cash equivalents) for their drugs when they filled the
prescriptions. See GX 16; GX 44; Tr. at 230 (discussing red flags).
Moreover, at each visit, the patients obtained prescriptions for two
short-acting formulations of oxycodone. According to the Government's
Expert, this is a red flag because with legitimate chronic pain
management, ``the patient should present a prescription for a long
acting plus a short acting,'' with the latter being used for
breakthrough dosing. Tr. 229. The Government's Expert further explained
that ``drug seekers tend to want the short acting medications because
those are the ones that will give them those immediate highs'' and you
``don't get the high you do from the long acting that you do from the
short.'' Id.
As the evidence shows, on March 11, 2010, L.S. and J.S. received
the exact same three prescriptions from the same doctor, Rene
Casanova,\13\ which Respondent filled the next day: 210 oxycodone 30,
90 oxycodone 15 and 75 alprazolam 2. See GX 16, at 1-11. At their April
8, 2010 visit to the clinic, L.S. and J.S. saw Dr. Randall Wolff.\14\
While Dr. Wolff did not prescribe alprazolam to them, he nonetheless
issued both of them prescriptions for 210 oxycodone 30 and 90 oxycodone
15. Id. at 13-19. While at their next visit (May 6, 2010) to the pain
clinic, a different doctor, Charles Neuringer,\15\ issued them slightly
different prescriptions for oxycodone 30 (210 du to L.S. and 180 to
J.S.), he provided them with identical prescriptions for 90 oxycodone
15 and 60 alprazolam 2, at their June 2, 2010 visit, Dr. Neuringer
provided them with identical prescriptions for 180 du of oxycodone 30,
90 oxycodone 15, and 60 alprazolam 2.\16\ Id at 21-44. Thus, even if
the Government did not produce evidence that these two persons were
travelling from North Carolina each time they obtained the
prescriptions, there were ample other red flags that provided
compelling evidence that the prescriptions they presented and
Respondent filled lacked a legitimate medical purpose.
---------------------------------------------------------------------------
\13\ I take official notice that following a hearing, on
September 19, 2012, the former Administrator revoked Dr. Casanova's
registration based on her findings that he issued controlled
substance prescriptions which lacked a legitimate medical purpose in
violation of 21 CFR 1306.04(a). See Rene Casanova, 77 FR 58150,
58151-52 (2012).
\14\ Following a hearing, on January 19, 2012, the former
Administrator revoked Dr. Wolff's registration based on her findings
that he issued controlled substance prescriptions which lacked a
legitimate medical purpose in violation of 21 CFR 1306.04(a). See GX
42, at 1; see also Randall L. Wolff, 77 FR 5106, 5121-22 (2012).
\15\ On or about December 17, 2010, Dr. Neuringer surrendered
his registration for cause. GX 41, at 1.
\16\ Respondent filled the May 6 and June 2 prescriptions the
same day they were issued.
---------------------------------------------------------------------------
Moreover, even if the Government did not show that L.S. and J.S.
were travelling from North Carolina each time they obtained
prescriptions and filled them at Respondent, the evidence shows that
between February 15, 2010 and April 1, 2011, Respondent dispensed more
than 1,500 controlled substance prescriptions to more than 500 patients
whose addresses indicated that they did not live in Florida. GX 2. The
patients came from such States as North Carolina, Ohio, West Virginia,
Kentucky, Tennessee, Mississippi, Georgia, and others. Id. Given the
number of these patients, I find it likely that many of them were
traveling to Florida in search of controlled substances.
Respondent also takes exception to the ALJ's crediting of the
testimony of Government's Expert regarding prescriptions issued by Dr.
M. to R.H. for 180 oxycodone 30, 112 Endocet (oxycodone/acetaminophen)
10/325, and 90 carisoprodol 350. Respondent dispensed the
prescriptions, and charged R.H. $945 for the oxycodone 30, $196 for the
Endocet, and $41.08 for the carisoprodol, for a total of $1182 in cash.
GX 19; GX 47. According to the prescriptions, R.H. resided in Panama
City, Florida, which is in the Florida panhandle and on the other side
of the State from Fort Lauderdale. Id.
Respondent objects to the ALJ's finding that these medications were
``prescribed to a 56 year old man \17\ by a pediatrician,'' arguing
that the prescriptions ``on their face solely indicated that the
physician . . . was associated with the Intercoastal [sic] Medical
Group'' and did not reflect that the doctor was a pediatrician.
Exceptions, at 12. Respondent further contends that Dr. M.'s DOH
Physician Profile indicated only that he had done a residency in
pediatrics and there was no testimony as to his current practice. Id.
---------------------------------------------------------------------------
\17\ The prescription label lists R.H.'s birthdate as April 2,
1954. GX 19, at 2.
---------------------------------------------------------------------------
However, even ignoring that Dr. M.'s DOH profile did not list Dr.
M. as having any specialty certification, see GX 35, at 3; let alone
certification in a specialty such as pain management, oncology, or
hospice and palliative medicine, see Tr. 229, these prescriptions
raised numerous other red flags which provided compelling evidence that
the prescriptions likely lacked a legitimate medical purpose. These
included the drugs, strength of the dosage units and quantities
prescribed; the distance R.H. likely travelled to obtain the
prescriptions; and R.H.'s willingness to pay nearly $1200 in cash for
the drugs. Indeed, were R.H. a legitimate chronic pain patient, these
prescriptions would have cost him more than $14,000 a year. Thus, I
reject Respondent's exception to the ALJ's Finding of Fact No.128.
Next, Respondent takes exception to the ALJ's crediting of the
Government's Expert's testimony regarding Respondent's dispensing of
prescriptions for 180 oxycodone 30 and 30 Xanax 2 which were written by
a doctor in Sunrise, Florida for three persons from West Palm Beach.
Exceptions, at 13 (citing R.D. 30-31, FOF# 130). Respondent states that
``[t]he ALJ accepted [the Expert's] statement that the doctor was
`rubberstamping the prescriptions and there was no individualized
treatment.' '' Id. (quoting FOF #130). Respondent argues that the
Expert's testimony was ``wholesale speculation'' because she did not
review patient files, or interview the patients or the doctors. Id.
Putting aside that ALJ's actual finding was that ``this appeared to
be an instance where the doctor was `rubber stamping' the
prescriptions,'' R.D. at 30 (emphasis added), Respondent does not
address other portions of the ALJ's findings, including that the
prescriptions were for cocktail medications and that Xanax 2 mg is a
high dose of Xanax. Id; see also Tr. 270-71. Moreover, the prescription
numbers assigned by Respondent show that the prescriptions were
presented sequentially, and the evidence shows that each of the
patients paid $900 in cash for the oxycodone 30 prescriptions. GX 50,
at 2; GX 2 (line items 2541-2546). Respondent also fails to explain why
legitimate patients would be willing to travel from West Palm Beach
[[Page 79194]]
down to Sunrise \18\ to obtain prescriptions and pay $900 cash for just
the narcotic, which was highly sought after by drug abusers and
diverters. Thus, even accepting that three persons presenting the same
prescriptions on a single day from the same doctor does not
conclusively establish that the latter was engaged in ``rubber
stamping'' or ``pattern prescribing,'' there were ample other indicia
which created a strong suspicion that the prescriptions lacked a
legitimate medical purpose.
---------------------------------------------------------------------------
\18\ According to a query conducted on Mapquest, of which I take
official notice, Pt. W.F. resided approximately 47 miles from Dr.
A.M.'s office.
---------------------------------------------------------------------------
Exceptions to the ALJ's Findings Regarding the Testimony of
Respondent's Expert
Respondent also argues that in her Finding of Fact #190, ``[t]he
ALJ erroneously made findings . . . concerning [its Expert's] testimony
as it relates to corresponding responsibility.'' Exceptions, at 14.
According to Respondent, ``the ALJ made findings . . . that [its
Expert] indicated that she has not done any research about the
corresponding responsibility of a pharmacist; had not given any
presentations about the corresponding responsibility of a pharmacist
since 2007; and has not published any research on corresponding
responsibility issues.'' Id. (citing R.D. 46). Respondent contends that
these findings are contrary to its Expert's unrebutted testimony that
``she sat on the National Association for Board of Pharmacy and sat on
a task force for the DEA'' on ``the implementation of prescription
monitoring programs.'' Id. (citing Tr. 795). According to Respondent,
its Expert testified that ``it was very conceivable that [the]
corresponding responsibility did come up in this context.'' Id.
Respondent further notes that its Expert ``testified that she has done
research on the area of corresponding responsibility'' because she
teaches students in simulated pharmacy dispensing exercises and
``needed to know that knowledge as well for regulatory compliance in
the stores I supervise.'' Id. (quoting Tr. 799).
As an initial matter, Respondent's Expert actually testified that
she ``needed to know that knowledge as well for regulatory compliance
in the stores I supervised.'' Tr. 799 (emphasis added). Notably, the
evidence shows that the Expert last supervised retail pharmacy stores
in 2006, when she went to work for the Institute for Safe Medication
Practices. Tr. 717; RX 24 (Expert's Resume). Thus, as of the hearing,
Respondent's Expert had not worked in regulatory compliance in nearly a
decade.
As for her participation on the task force on prescription
monitoring programs, her actually testimony was: ``I don't know if we
ever discussed that . . . that term [i.e., the corresponding
responsibility], but we had a task force with DEA, so to the extent
that the DEA wanted to bring that up, we would talk about it.'' Tr.
794. When pressed by the Government if the term came up, Respondent's
Expert answered: ``But I can't remember it. I don't remember,'' after
which she testified that she did not remember one way or the other but
stated that it was ``very conceivable that the term would have come
up.'' Id. at 794-95.
Respondent also cites to other portions of its Expert's testimony
regarding her knowledge of a pharmacist's corresponding responsibility,
including her testimony that she has reviewed administrative decisions
published by the Agency, the DEA Pharmacist's Manual, and ``pharmacy
journals to the extent that they've published anything about that.''
Tr. 800; see also Exceptions, at 14. Respondent also notes that its
Expert ``is a member of the American Society of Pharmacy Law.''
Exceptions, at 14-15. However, when asked whether the corresponding
responsibility had been discussed at any of the Society's meetings,
Respondent's Expert answered: ``I don't remember.'' Tr. 801.
The ALJ specifically found that ``the testimony of Respondent's
Expert . . . is not credible as it relates to the general knowledge of
Florida pharmacists from 2010 to 2012.'' R.D. 68. Having reviewed the
record and ALJ's findings, I agree with the ALJ and her reasons for
declining to credit the testimony of Respondent's Expert.
As explained above, Respondent's Expert has not supervised retail
pharmacies in nearly a decade and, in her own testimony, she
acknowledged that she has not filled a prescription in 15 years. Tr.
794. Moreover, Respondent's Expert is licensed only in Massachusetts
and while she ``did a consulting job in Florida,'' she has not worked
as a dispensing pharmacist in the State.\19\ RX 24, at 1; Tr. 737.
---------------------------------------------------------------------------
\19\ Respondent's Expert did not further explain what the
``consulting job'' involved. Tr. 737.
---------------------------------------------------------------------------
Also, much of her testimony as to how she has become knowledgeable
on a pharmacist's corresponding responsibility was vague. While
Respondent's Expert claimed to have reviewed various Agency decisions
including East Main Street Pharmacy, 75 FR 66149 (2010), in determining
what red flags of abuse and diversion were generally known to
pharmacists during the period of 2010 through 2012, she then opined
that she did not believe that many of the red flags identified in that
decision \20\ were widely known to be indicators of diversion and
abuse.
---------------------------------------------------------------------------
\20\ Of note, the East Main Street findings were based on the
testimony of an expert witness for the Government. 75 FR at 66156.
---------------------------------------------------------------------------
For example, Respondent testified that in her opinion, the
combination of prescriptions for a narcotic, a benzodiazepine, and
carisoprodol ``would [not] signify a pattern of drug abuse to
pharmacists in 2010.'' Tr. 865. Yet, based on the expert testimony in
East Main Street Pharmacy, the Agency found that ``the combination of a
benzodiazepine, a narcotic and carisoprodol is `well known in the
pharmacy profession' as being used `by patients abusing prescription
drugs.' '' \21\ 75 FR at 66163.
---------------------------------------------------------------------------
\21\ In East Main Street, the Agency also noted the Government
Expert's testimony that ``these cocktails would have a synergistic
effect on a person's central nervous system and could cause
respiratory depression.'' 75 FR at 66163.
---------------------------------------------------------------------------
Respondent also testified that she did not believe that it was
widely known in 2010 that a patient paying cash was an indicator of
abuse or diversion. Tr. 864. However, in East Main Street, the Agency
found, based on expert testimony, that ```any reasonable pharmacist
knows that a patient that wants to pay cash for a large quantity of
controlled substances is immediately suspect.' '' 75 FR at 66158.
Respondent's Expert also opined that she did not believe that
patients travelling long distances to obtain prescriptions was widely
known in 2010 to be an indicator of abuse or diversion of prescription
drugs. Tr. 864. However, in East Main Street, \22\ the Agency found
that ``the fact that the patients were driving so far to get their
prescriptions filled `would be a major red flag to any pharmacist.' ''
75 FR at 66164; see also id. at 66158 (discussing testimony of expert
witness that the fact that patients were ``driving 2 + hours'' to fill
prescriptions ``would be a major red flag to any pharmacist and that a
reasonable pharmacist would seriously question why these patients were
driving such a long distance to have their prescriptions filled'' and
that ``the number one reason'' consumers shop at certain pharmacies
``is proximity to where they live'').
---------------------------------------------------------------------------
\22\ In East Main Street, the patients were generally travelling
from the Portsmouth, Ohio and northern Kentucky to Columbus, Ohio, a
considerably shorter distance than that travelled by many of the
patients in this matter. See 75 FR at 66158.
---------------------------------------------------------------------------
[[Page 79195]]
As for whether, in 2010, pattern prescribing was also an indicator
that prescriptions were not issued for a legitimate medical purpose,
Respondent's Expert opined that she did not believe that this ``was
widely known by pharmacists'' to be ``happening.'' Tr. 865. Yet, in
East Main Street, the Agency found that ``in the prescriptions he
reviewed, the Government['s] Expert observed that there was `no
individualization of dosing based on pain in these patients' with
respect to the hydrocodone and alprazolam prescriptions and that `any
pharmacist would have known that this was a problem and a strong
indicator of a doctor operating a controlled substance prescribing
mill.' '' 75 FR at 66163.
Finally, when asked whether in her view, it was widely known in
2010 that Xanax in the two milligram dosage was to be used in ``only
very rare circumstances,'' Respondent asserted that ``it was not widely
known that Xanax should be reserved for certain circumstances.'' Tr.
865-66. However, in East Main Street, the Agency found that ``with
respect to the alprazolam, the Government's Expert explained . . . that
the two-milligram strength . . . is generally only prescribed for a
patient with post-traumatic stress disorder.'' 75 FR at 66163.
Respondent's Expert further maintained that the first time DEA
publicly addressed the issue of out-of-state patients coming to
pharmacies was in the 2012 Holiday CVS decision. Tr. 752-53; see also
Holiday CVS, L.L.C., d/b/a CVS Pharmacy Nos. 219 and 5195, 77 FR 62316,
62321 (2012). However, in East Main Street, the Agency had noted that
``approximately half'' of the pharmacy's patients ``were coming from
Kentucky,'' which ``was more than two hours away,'' and that this
``would be a major red flag to any pharmacist.'' 75 FR 66164. Beyond
this, it is obvious that patients travelling great distances to obtain
large quantities of potent narcotics such as oxycodone 30 are likely
seeking the drugs to either abuse them or divert them to others.\23\
---------------------------------------------------------------------------
\23\ Respondent's Expert also testified that the first reference
to the term ``red flag'' that she could find in DEA's public
pronouncements was in the Holiday CVS decision. Tr. 753. However,
the term appears in DEA administrative decisions involving
practitioners including pharmacies even earlier than in East Main
Street. See Paul J. Caragine, 63 FR 51592, 51600 (1998); see also
Medicine Shoppe-Jonesborough, 73 FR 364 (2008); United Prescription
Services, Inc., 72 FR 50397 (2007). It also has appeared in federal
court decisions that predate 2010. See United States v. Johnston,
322 Fed. Appx. 660, 666-68 (11th Cir. 2009); Medicine Shoppe-
Jonesborough v. DEA, 300 Fed. Appx. 409, 413 (6th Cir. 2008); United
States v. Alerre, 430 F.3d 681,686 (4th Cir. 2005); United States v.
Chin, 795 F.2d 496, 502 (5th Cir.1986).
In any event, the term ``red flag'' has been part of the lexicon
for more than 200 years, and whether the Agency has used this term,
or such terms as ``warning signs'' or ``suspicious circumstances,''
is of no consequence. See III The Compact Edition of the Oxford
English Dictionary 1132 (1987) (noting term's use ``[a]s a sign of
danger, a warning, or a signal to stop''); Jayam Krishna-Iyer, 74 FR
459, 460-61 n.3 (2009). What matters is whether Respondent's
pharmacists either knew or were willfully blind to the fact that the
controlled substance prescriptions they dispensed lacked a
legitimate medical purpose. 21 CFR 1306.04(a).
---------------------------------------------------------------------------
Respondent also argues that the ALJ ``erroneously made findings
that suggested [that its Expert's] opinions in this case that [it]
should maintain its . . . registration was based solely on her
`conversations with Ms. Jones.' '' Exceptions, at 15 (quoting R.D. 47,
FOF#194). The ALJ did not, however, find that the Expert's Opinion was
based ``solely'' on her conversations with Ms. Jones. See R.D. 47,
FOF#194. Indeed, the ALJ specifically noted the Expert's testimony that
Respondent ``has displayed a `positive trend downwards as to the amount
of controlleds that are dispensed per non-controlleds.' '' Id. (quoting
Tr. 785). And the ALJ also acknowledged that Respondent's Expert had
reviewed Respondent's policies and ``opined that Ms. Jones has changes
`policies and procedures as she [has] learned about things.' '' R.D.
48, FOF#197 (citing Tr. 832-33 and quoting Tr. 850).
However, the ALJ also noted that Respondent's Expert ``did not
offer any opinions as to whether or not [Respondent's] dispensing of
controlled substances was abnormal in 2010 [through] 2012.'' R.D. 47,
FOF #195. Indeed, when asked if she was offering any opinion as to
whether Respondent's dispensing in this period ``was atypical or
abnormal,'' Respondent's Expert answered: ``No, but I do think she did
exercise her corresponding responsibility in 2014.'' Tr. 809.
Respondent's Expert further admitted that she was not ``offering any
opinions . . . on whether . . . any specific prescriptions was or was
not filled by [Respondent] in compliance with [its] corresponding
responsibility.'' Id. Respondent's Expert also testified that she was
not offering any opinions as to whether the extent to which Respondent
filled prescriptions for cash or for out of state patients was atypical
or abnormal. Id. at 810-812.
In short, having reviewed Respondent's exceptions to the ALJ's
findings as to the testimony of its Expert, I find no reason to reject
the ALJ's credibility finding.\24\
---------------------------------------------------------------------------
\24\ In this section of its Exceptions, Respondent also takes
issue with the ALJ's finding that ``[t]he Florida E-FORSCE website
indicated that the system was created in 2009 by the Florida
legislature.'' Exceptions, at 15 (citing R.D. 41 n. 21). Respondent
argues that ``[i]t appears the ALJ may have performed independent
research concerning the E-FORSCE system because it does not appear
that either party introduced the website'' into evidence. Id.
Respondent notes that neither party requested that the ALJ to take
judicial notice of the website. Id. Respondent further argues that
the E-FORSCE system did not become operational until September 1,
2011. Exceptions, at 15-16 (citing a fact sheet at the website).
The ALJ did not, however, base her finding that Respondent's
pharmacists violated their corresponding responsibility on their
failure to use the E-FORSCE system in determining whether to
dispense the prescriptions. Nor do I. Thus, the ALJ's noting that
the Florida legislature enacted the legislation creating the system
in 2009 is not a material fact and no error was committed. See 5
U.S.C. Sec. 556(e) (``When an agency decision rests on official
notice of a material fact not appearing in the evidence in the
record, a party is entitled, on timely request, to an opportunity to
show the contrary.'').
---------------------------------------------------------------------------
Exceptions to the ALJ's Conclusions of Law
Exceptions to the ALJ's Legal Conclusion as to Factor One
In discussing Factor One--the recommendation of the state licensing
board--the ALJ found that the record did not contain a recommendation
from the Florida Board or any evidence of disciplinary action taken
against Respondent or Ms. Jones. R.D. at 57-58. Noting that under DEA
precedent, ``[t]he ultimate responsibility to determine whether a
registration is consistent with the public interest has been delegated
exclusively to the DEA [and] not to entities within state government,''
the ALJ held that the absence of a recommendation or disciplinary
action against Respondent (or Ms. Jones) is not dispositive and neither
weighs in favor of, or against, a determination as to whether
Respondent's continued registration is consistent with the public
interest. R.D. at 58 (citing Top Rx, 78 FR 26069, 26081 (2013); Edmund
Chein, 72 FR 6,580, 6590 (2007), pet. for rev. denied Chein v. DEA, 533
F.3d 828 (D.C. Cir. 2008)).
Respondent argues that the actions of the DOH in conducting six
inspections, which found that ``in virtually all of those exams, and
certainly all exams subsequent to 2012,'' Respondent ``was in
compliance with all rules and regulations including those relating to
the maintenance of ordering forms and inventory,'' ``should be deemed
as persuasive for continued registration.'' Exceptions, at 16. However,
this statement is contradicted by the record evidence related to the
DOH inspections.\25\
---------------------------------------------------------------------------
\25\ For example during the June 10, 2013 Inspection, the
Inspector found that Respondent was non-compliant with the
requirement that it report controlled substance dispensings to the
PDMP within 7 days. RX 8, at 3. Also, during the August 29, 2014
inspection, the DOH Inspector found that Respondent was non-
compliant with Florida law requiring that it maintain controlled
substances records ``for 4 years.'' Id. at 1. Also at the latter
inspection, the Inspector noted that ``controlled substance invoices
are mixed in with non-controlled'' and that ``CII should be separate
and CIII-V should be marked if filed with noncontrols [sic] [and]
must be readily retrievable from all other records.'' Id. Of note,
under 21 CFR 1304.04(h)(1), ``[i]nventories and records of all
controlled substances listed in schedule I and II shall be
maintained separately from all other records of the pharmacy.''
---------------------------------------------------------------------------
[[Page 79196]]
Respondent also argues that because ``the State has taken no action
adverse to [it], the ALJ should have found that this factor weighed in
favor of continued registration.'' Id. (citing Physicians Pharmacy,
L.L.C., 77 FR 47096 (2012)). However, while Respondent retains its
state authority, the Agency has long held that possession of state
authority is a prerequisite for obtaining and maintaining a
registration.\26\ Whether a registrant retains its state license is not
a factor in determining whether it has committed acts which render its
registration inconsistent with the public interest.\27\ Thus, in the
absence of a recommendation regarding Respondent's registration,
Respondent's continued possession of its State authority is not
dispositive and neither supports nor refutes the Government's
contention that its registration is ``inconsistent with the public
interest.'' 21 U.S.C. Sec. 823(f). Accordingly, I agree with ALJ's
ruling that factor one ``does not weigh for or against a determination
as to whether the Respondents' continued registration is consistent
with the public interest,'' R.D. 58, and reject the exception.
---------------------------------------------------------------------------
\26\ Thus, consistent with the structure of section 823(f),
determining whether an applicant possesses state authority is an
inquiry which is required before the Agency considers the public
interest factors. See 21 U.S.C. Sec. 823(f). And in revocation
proceedings, a registrant's loss of state authority is a basis for
revoking a registration which is independent from the determination
of whether a registrant has committed such acts as to render its
registration inconsistent with the public interest. Compare id.
Sec. 824(a)(3) with id. Sec. 824(a)(4).
To be sure, there are cases in which the Agency has adopted a
recommended decision which endorsed the view that the possession of
a valid state license ``weighs against a finding that Respondent's
registration would be inconsistent with the public interest.''
However, whether an applicant possesses the requisite state
authority is properly viewed as a threshold matter which is to be
considered before the public interest determination is made.
\27\ Certainly conduct which causes a State Board to suspend or
revoke a practitioner's controlled substances authority may involve
controlled substances and provide a basis to revoke under the public
interest standard. But a State Board may also suspend or revoke a
practitioner's state authority for reasons having nothing to do with
a registrant's controlled substance activities; while such cases do
not implicate the public interest standard, they are nonetheless
grounds to revoke based solely on the registrant's loss of state
authority. 21 U.S.C. Sec. 824(a)(3).
---------------------------------------------------------------------------
Exceptions to the ALJ's Legal Conclusions as to Factors Two and Four
In her decision, the ALJ found that Respondent ``violated
recordkeeping requirements by failing to record whether [its] biennial
inventory was taken at the opening or close of business, and by failing
to indicate the number of tablets per opened commercial container, the
number of tablets shipped in each commercial container, and the number
of commercial containers that Ms. Jones had on hand.'' R.D. at 59
(citing 21 CFR 1304.11(e)(3)). Reasoning that without ``a complete
inventory, the DEA is unable to conduct an accurate accountability
audit,'' the ALJ, while acknowledging that ``the inventory was complete
in other aspects,'' then explained that ``Ms. Jones' partial compliance
does not obviate her failure to record the required the information on
the biennial inventory.'' Id. at 60. The ALJ further explained that
``Respondent's lack of attention to detail with its accountability of
the controlled substances received and dispensed is adequate grounds
for recommending [the] revocation of [its] registration.'' Id. (citing
Alexander Drug Co., 66 FR 18299, 18303 (2001) (citing Singers-Andreini
Pharmacy, Inc., 63 FR 4668 (1998))).
Respondent argues that the ALJ's conclusion ``was one of form over
substance'' and that ``the unrebutted testimony of Ms. Jones, the
biennial inventories presented, [its] expert['s] testimony . . . , and
the DOH inspections, all establish that Jones Pharmacy was in
substantial compliance with the applicable regulation,'' and that this
standard ``is recognized in DEA regulations.'' Exceptions, at 17, 19
(citing 21 CFR 1301.71(b)). Respondent further argues that revocation
is not warranted based on ``these minor deficiencies.'' Id. at 19.
Contrary to Respondent's understanding, the ``substantial
compliance'' standard applies only with respect to the Agency's
assessment of an applicant's/registrant's ``overall security system.''
21 CFR 1301.71(b). Moreover, in the Controlled Substances Act, Congress
set the standard for assessing the adequacy of a registrant's
inventories by requiring that ``every registrant . . . make a complete
and accurate record of all stocks thereof on hand.'' 21 U.S.C. Sec.
827(a)(1) (emphasis added). See also id. Sec. 827(a)(3) (requiring
that ``every registrant . . . shall maintain . . . a complete and
accurate record of each such substance . . . received, sold, delivered,
or otherwise disposed of'').
Under DEA's regulations, Respondent's inventories were neither
complete nor accurate. They were not complete because they did not list
the number of commercial containers on hand and the number of units in
each such container. See 21 CFR 1304.11(e)(3); id. Sec.
1304.11(e)(1)(iii)-(iv). Nor were they accurate because they did not
indicate whether the inventory was taken ``as of [the] opening of
business or as of the close of business.'' Id. Sec. 1304.11(a). In the
absence of the inventories indicating whether they were taken at the
opening or close of business, DEA personnel conducting an audit would
not know whether to count the prescriptions dispensed and any shipments
received (as well as any returns or other dispositions) on the dates
that the inventories were taken.
Respondent nonetheless argues that because the inventories listed
the NDC number of the controlled substances, and ``the last two digits
of the NDC number represent the bottle size,'' the inventories
contained the required information. Exceptions, at 18. While it may be
that the last two digits of an NDC number indicate the bottle size,
there are a multitude of different manufacturer's controlled drug
products on the market and DEA personnel had no obligation to
investigate what bottle size corresponded with the various NDC numbers
listed on Respondent's inventories.\28\
---------------------------------------------------------------------------
\28\ Respondent also asserts that its Expert ``found it
compelling that the DOH remarked in the October 12, 2011 DOH report
that [it] had a zero (0%) percent error rate on its physical
inventory.'' Exceptions, at 18. Putting aside that the Inspector's
comment pertained to an audit he conducted and not an inventory, see
RX 8, at 7; the Inspector's Report noted that Ms. Jones had not
provided a controlled drug report and that the software company had
to be contacted ``in order to figure out how to print the report.''
Id. Thus, the DOH Inspector's audit likely did not include
controlled substances.
---------------------------------------------------------------------------
Moreover, despite her factual finding that 480 line items on
Respondent's schedule II order forms were not completed correctly, the
ALJ did not draw a legal conclusion as to whether Respondent was in
compliance with DEA's regulations. Compare R.D. at 18-19 (FOF Nos. 89-
91), with id. at 58-60 (discussing legal conclusions with respect to
recordkeeping). I find that Respondent violated DEA regulations by
failing to properly record ``the number of commercial or bulk
containers furnished on each item and the dates on which the containers
are received by the purchaser.'' 21 CFR 1305.13(e).
[[Page 79197]]
While Respondent argues that the violations found by the ALJ do not
support revocation, I need not decide whether these violations,
including those based on its failure to properly complete the order
forms, would support the revocation of Respondent's registration as
opposed to some lesser sanction. This is so because the evidence shows
that Respondent has committed egregious dispensing violations which
fully support the denial of both its and SND's applications.
Exceptions to the ALJ's Findings That Respondent Violated Its
Corresponding Responsibility
Respondent raises five arguments as to why I should reject the
ALJ's legal conclusion that it violated 21 CFR 1306.04(a). The first
three of these are based primarily on the ALJ's reliance on the
testimony of the Government's Expert that many of the prescriptions
presented red flags which were unresolvable. They include that: (1)
Government's Expert was not qualified to testify as an Expert; (2) the
Expert was biased; and (3) its right to due process was violated when
the ALJ denied its request for a copy of the Expert's report.
Exceptions, at 20-24. As for its other contentions, Respondent argues
that: (4) Substantial evidence does not support a finding that
Respondent knew or should have known of the various red flags, id. at
24-29; and (5) this proceeding ``may have been brought for punitive
reasons'' because Respondent's owner complained to her congressional
representatives when DEA failed to approve her request to change her
registered location. Id. at 30. I find that none of these contentions
have merit.
Respondent's Challenges to the Government's Expert
Respondent first challenges the ALJ's ruling accepting the
Government's Expert as an Expert in retail pharmacy. Tr. 224. According
to Respondent, the Government's Expert was not qualified to testify as
such because she has ``no expertise of ever serving on pharmacy
boards,'' has ``never taught pharmacy,'' has ``never worked at an
independent pharmacy . . . or testified about any expertise with
independent pharmacies,'' and ``is not currently working in a capacity
where she [is] dispensing.'' Exceptions, at 21. Respondent also argues
that the Government's Expert's ``retail pharmacy experience was limited
to that of an assistant manager at Publix [a supermarket chain]--and
before that [as] a pharmacist at Walgreens,'' these being ``large
retail institutions that had significant resources.'' Id. And
Respondent argues that the Expert ``had never before been qualified as
an expert,'' that she ``has not published any articles relating to red
flags of diversion,'' nor written ``any policies or procedures relating
to diversion'' or ``controlled substances.'' Id. at 21-22.
The evidence shows, however, that Government's Expert holds both a
Bachelor of Science in Pharmacy and a Doctor of Pharmacy degree. GX 25,
at 1. She testified that she had 17 years of experience working in
retail pharmacies, Tr. 214, and her CV shows and she has 10 years of
experience working a pharmacist, an assistant manager and a pharmacy
manager at retail pharmacies. GX 25, at 2, 4. She testified to having
dispensed an estimated five million prescriptions. Tr. 216.
She also testified that based on her education and professional
experience she was familiar with a pharmacist's responsibilities in
dispensing controlled substances and issues involving the diversion and
abuse of controlled substances. Id. at 218-19. Thus, the Government's
Expert's experience and education provided an ample basis for the ALJ
to deem her qualified to testify as an expert witness. See, e.g.,
United States v. Roach, 644 F.3d 763, 764 (8th Cir. 2011) (physician
qualified to testify as expert on issues based on knowledge acquired
``solely from on-the-job observations and attendance at conferences and
seminars''); American General Life Ins. Co. v. Schoenthal Family, LLC,
555 F.3d 1331, 1338-39 (11th Cir. 2009) (rejected argument that
``[e]xperience alone . . . can never form the basis for expert
testimony,'' and noting that expert's education and experience rendered
him qualified to testify as expert on insurance industry standards). I
therefore reject Respondent's argument to the contrary.\29\
---------------------------------------------------------------------------
\29\ While Respondent invokes Rule 702 of the Federal Rules of
Evidence (which provide only guidance in this proceeding, see
Rosalind A. Cropper, 66 FR 41040, 41041 (2000)), even under Rule
702, the Government's Expert would have been deemed qualified to
testify as such based on her experience and knowledge. There is no
requirement that an expert has served on a Board of Pharmacy, has
written articles on or taught the subject matter, or has previously
testified as an expert. See Fed. R. Evid.702 (Advisory Committee
Notes 2000 Amendments) (``Nothing in this amendment is intended to
suggest that experience alone-or experience in conjunction with
other knowledge, skill, training or education-may not provide a
sufficient foundation for expert testimony.''); Beins v. United
States, 695 F.2d 951, 609 (D.C. Cir. 1982) (expert's lack of
publications in field not disqualifying). As for Respondent's
argument that the Expert's experience was limited to working ``in
large retail institutions'' and not independent pharmacies, the
Agency's corresponding responsibility rule applies in the same
manner to all pharmacies.
---------------------------------------------------------------------------
Respondent further maintains that the Expert was biased because she
``testified that she helped write the Order to Show Cause.''
Exceptions, at 22. Respondent also notes that the Expert testified that
she had provided a report to DEA, which was in existence when it sought
discovery from the Government, but that the ALJ denied its request for
discovery. Respondent further argues that the ALJ's ruling denying its
request for the Expert's report was a denial of its right to due
process. Id. at 23 (citing McClelland v. Andrus, 606 F.2d 1278, 1286
(D.C. Cir. 1979)). Respondent then asserts that the Expert's report
``likely contained the identity of other witnesses and may have lead
[sic] to the discovery of additional evidence.'' Id. at 24.
As for Respondent's claims that the Government's Expert was biased
because she ``testified that she helped write the Order to Show
Cause,'' the Expert's testimony was: ``Yes, I provided a report of my
findings and my opinion only.'' Tr. 303. And when then asked by
Respondent if she had ``seen that report in any documents that have
been shown to you in this proceeding,'' the Expert ``I think they
showed it to me after the fact. This is what we submitted to you. They
showed me the Order after, yes. After they gave it to you, they
forwarded it to me too, but I'm going to be honest, I don't read all
that stuff.'' Id.
Of note, the record contains no indication that the Show Cause
Order (which was in the record as ALJ Ex. 1) was presented by
Respondent to the Expert when this colloquy occurred. See id. And when
the Government objected to this line of questioning on the ground that
``we're using terms here . . . in a confusing manner'' and asked that
Respondent's counsel ``show her the document,'' the ALJ instructed
Respondent's Counsel that ``if you would be precise in what you're
referring to, that would be very helpful,'' before adding that ``[i]t
is confusing.'' Tr. 304. Respondent's Counsel then proceeded to ask the
Government's Expert about the report she submitted. Id. at 305. As I
also find the record confusing, I do not find it established that the
Government's Expert helped to write the Order to Show Cause other than
in the sense that she reviewed the prescriptions and provided a report
to the Government.
I also reject Respondent's contention that it was entitled to
discovery of the Expert's report. As several courts of appeals have
recognized, ``[t]he
[[Page 79198]]
Administrative Procedure Act contains no provision for pretrial
discovery in the administrative process . . . and the Federal Rules of
Civil Procedure for discovery do not apply to administrative
proceedings.'' Silverman v. CFTC, 549 F.2d 28, 33 (7th Cir. 1977); see
also Mister Discount Stockbrokers, Inc., v. SEC, 768 F.2d 875 (7th Cir.
1985). Rather, `` `[t]he extent of discovery that a party is entitled
to is primarily determined by the particular agency.' '' Mister
Discount Stockbrokers, 768 F.2d at 878 (quoting McClelland, 606 F.2d at
1285).
DEA's regulations do not, however, provide for broad-based
discovery. Rather, consistent with the Due Process Clause, they provide
only the right to receive in advance of the hearing a summary of the
anticipated testimony of the Government's witnesses and copies of the
Government's proposed exhibits.
To be sure, the Agency has recognized that ``discovery must be
granted if in the particular situation a refusal to do so would so
prejudice a party as to deny [it] due process.'' Margy Temponeras, 77
FR 45675, 45676 n.4 (2012) (quoting McClelland, 606 F.2d at 1285)). See
also Goldberg v. Kelly, 397 U.S. 254, 270 (1970) (``where governmental
action seriously injures an individual, and the reasonableness of the
action depends on fact findings, the evidence used to prove the
Government's case must be disclosed to the individual so that he has an
opportunity to show that it is untrue'') (int. quotations and other
citation omitted). However, ``the party seeking discovery must rely on
more than speculation and must show that the evidence is relevant [and]
material, and that the denial of access to the documents is
prejudicial.'' Beau Boshers, 76 FR 19401, 19403 (2011) (citing Echostar
Comm. Corp. v. FCC, 292 F.3d 749, 756 (D.C. Cir. 2002); Silverman, 549
F.2d at 34). The prejudice must be of such ``a significant degree so as
to result in a denial of due process.'' Mister Discount Stockbrokers,
768 F.2d at 878.
While Respondent contends that the denial of its right to the
report of the Government's Expert violated its right to due process, I
conclude that Respondent has failed to identify any prejudice, let
alone prejudice resulting in the denial of due process. Notably, in
advance of the hearing, the Government provided Respondent with a
thorough disclosure of the testimony it expected to elicit from its
Expert regarding the various red flags of diversion present in the
prescriptions she reviewed and it also identified those sets of
prescriptions which its Expert would testify were ``filled in the face
of numerous unresolvable red flags for diversion.'' ALJ Ex. 11, at 16-
19 (Govt. Prehearing Statement). Moreover, Respondent makes no claim
that the Government failed to provide copies of its proposed exhibits
in advance of the hearing as required by the ALJ's Prehearing Ruling.
ALJ Ex.16, at 3. Thus, Respondent was fully apprised of the
Government's theory of the case and the evidence it intended to rely on
and Respondent had ample opportunity to prepare a defense.
While Respondent asserts that by denying it ``access to [the
Expert's] report, [it] was denied access to part of the evidence on
which the DEA relies [on] to revoke its license,'' Exceptions, at 24;
the Government did not introduce the report into evidence and thus did
not rely on it to prove its case. Moreover, Respondent was able to
thoroughly cross-examine the Government's Expert as to the basis of her
opinions that the prescriptions presented unresolvable red flags. See
Tr. 289-359; 375-79.
Respondent further asserts that it has been prejudiced because the
Expert's report ``likely contains the identity of other witnesses and
may have lead [sic] to the discovery of additional evidence.''
Exceptions, at 24. However, earlier in its Exceptions, Respondent
argued that I should reject the ALJ's findings as to the prescriptions
in GX 22 because the Government's Expert acknowledged that ``she had
not . . . spoken with the doctors, or the patients or any physicians
that had issued the prescriptions at issue in this action.''
Exceptions, at 13 (citing Tr. 317). As Respondent has not even
suggested what other type of witnesses it believes the Expert's report
refers to, its claim of prejudice rests on pure speculation. I
therefore reject its exception.\30\
---------------------------------------------------------------------------
\30\ In light of my conclusion that Respondent has not shown
that the denial of the Expert's report is so prejudicial as to deny
it due process, I do not address the Government's argument that the
report was a draft report which even under the Federal Rules of
Civil Procedure need not be disclosed to the opposing party. Govt.
Resp. to Respondents' Exceptions, at 20-21 (citing Fed. R. Civ. P.
26(b)(4)(B)). Nor do I address the Government's contention that the
parties agreed that the only documents subject to disclosure were
the prehearing summaries of the expected testimony, the experts'
CVs, and any documents that their experts would be expected to refer
to on direct examination and that Respondents ``are complaining
about a document they abandoned months before the hearing.'' Id. at
19.
---------------------------------------------------------------------------
Respondent's Contention That Substantial Evidence Does Not Support a
Finding That It Knew or Should Have Known of the Red Flags
Respondent argues that ``[t]he ALJ improperly concluded that
[Respondent] knew or should have recognized a red flag prior to the
time the controlled substances were dispensed.'' Exceptions, at 24.
Noting the ALJ's reliance on Holiday CVS, Respondent argues that
``unlike the Holiday CVS case, there was no evidence in the record of
this case that any controlled substance was diverted, or any
prescription [was] issued by a prescribing physician who lacked
authority to prescribe controlled substances.'' Id. at 24-25.
Respondent further argues that in Holiday CVS, the pharmacies ``were
specifically advised by DEA staff on more than one occasion of
prescribing patterns to look out for as potential indicators of
diversion.'' Id. at 25 (citing 77 FR at 62326, 62331). Respondent thus
contends that ``[n]one of these facts are [sic] present in this
action.'' Id.
While it is true that in Holiday CVS, the Agency found that
pharmacies knowingly filled prescriptions issued by two physicians who
were no longer registered and did so well after the pharmacies should
have known that the physicians were no longer registered, that was only
a small part of the case. See 77 FR at 62316-317. Rather, the heart of
the Government's case was that the pharmacies' pharmacists had
repeatedly violated their corresponding responsibility by dispensing
prescriptions when they either knew or were willfully blind to the fact
that the prescriptions lacked a legitimate medical purpose. See id. at
62317-322; see also id. at 62332-334.
Contrary to Respondent's contention, the Government's proof was
similar to that put forward in this case in that it was based entirely
on circumstantial evidence. More specifically, the evidence showed
that: (1) The patients were travelling long distances (and frequently
from out-of-state) to obtain their prescriptions; (2) the prescriptions
were for large quantities of such highly abused drugs as oxycodone 30
and alprazolam; (3) the doctors issued prescriptions for combinations
of oxycodone (including two dosage strengths both oxycodone 30 and 15)
and alprazolam; and (4) the patients were paying cash for the
prescriptions. See id. at 62332-34.
As in this matter, in Holiday CVS, the Government did not put
forward any witness who testified that he/she had ``personal
knowledge'' that the drugs were being diverted. While Respondent
further argues that the Government did not put on any evidence ``that
any diagnosis was not legitimate . . . or that any controlled substance
was diverted after a prescription was filled,'' Exceptions, at 29; the
Government did introduce evidence showing that several
[[Page 79199]]
of the physicians either surrendered their registrations or had their
registrations revoked after a hearing in which they were found to have
issued prescriptions in violation of 21 CFR 1306.04(a). See Rene
Casanova, 77 FR at 58151-52; GX 42, at 1 (registration printout for
Randall L. Wolff); Wolff, 77 FR at 5121-22; GX 41, at 1 (registration
printout showing Dr. Neuringer surrendered his registration for
cause).\31\
---------------------------------------------------------------------------
\31\ The evidence also shows that Respondent filled controlled
substance prescriptions issued by Drs. Jacobo Dreszer (4 Rxs),
Michael Aruta (7 Rxs), Beau Boshers (12 Rxs), and Cynthia Cadet (2
Rxs). See GX 2 (line entries nos. 25, 41, 53-60, 70-83, 87). I take
official notice that on February 25, 2010, the former Administrator
ordered the immediate suspension of each of these doctor's
registrations, and following a consolidated hearing before an ALJ,
the former Administrator found that each of these doctors had issued
controlled substance prescriptions outside of the usual course of
professional practice and which lacked a legitimate medical purpose
and revoked their respective registrations. See Cynthia M. Cadet, 76
FR 19450, 19451, 19465 (2011); Michael J. Aruta, 76 FR 19420, 19420,
19434 (2011); Beau Boshers, 76 FR 19401, 19404, 19419 (2011); Jacobo
Dreszer, 76 FR 19386, 19389-90, 19401 (2011).
---------------------------------------------------------------------------
Nor do I find persuasive Respondent's attempt to distinguish
Holiday CVS because in that matter, agency Investigators met with CVS
employees and discussed both a pharmacist's corresponding
responsibility and various red flags attendant with illegitimate
prescriptions. To the extent Respondent suggests that its owner and
pharmacists were entitled to a similar briefing, and should be excused
from liability because they did not receive such a briefing, it is
mistaken. DEA does not have the resources to personally brief every
registrant following its discovery of new patterns of diversion.\32\
Rather, as a participant in a highly regulated profession, Respondent's
owner had an obligation to keep herself informed regarding regulatory
developments which affected her profession. Cf. Holiday CVS, 77 FR at
62317 (citing United States v. Southern Union Co., 630 F.3d 17, 31 (1st
Cir. 2010) (``[T]hose who manage companies in highly regulated
industries are not unsophisticated. . . . It is part of [a company's]
business to keep abreast of government regulations.'')).
---------------------------------------------------------------------------
\32\ In Holiday CVS, one of the Government's Investigators (who
also testified in this proceeding) testified that the DEA Weston
Office had decided in 2005 ``to interview all new pharmacy
applicants and also treat all new pharmacy applications the same and
alert the chains. So when there was a new pharmacy opening up, I
would contact them and they would come in for a discussion of the
situation.'' 77 FR at 62331. Respondent cites to this testimony and
argues that ``[t]here was no testimony from DEA staff that the DEA
ever provided similar information to [it] during the . . . time
period covering the prescriptions at issue in this action.''
Exceptions, at 29 n.32. Respondent thus suggests that ``there was a
disparity of treatment between types of pharmacies despite the DEA
seeking to impose the same knowledge on [it] that was given to
Holiday CVS.'' Id.
To the extent Respondent raises the lack of such a briefing as
an affirmative defense, the burden of production was on Respondent
to show that it did not occur and Respondent produced no evidence as
to whether DEA Investigators visited it prior to granting its
initial application, let alone that they failed to conduct a
briefing on red flags associated with unlawful prescriptions.
Second, even if Respondent had established that it was treated
differently than chain pharmacies because it was an independent
pharmacy, the Government's basis for treating it differently would
only be subject to rational basis review. Cf. FCC v. Beach Comm.,
Inc., 508 U.S. 307, 316-17 (1993). Finally, because the regulation
provides constitutionally adequate notice of a pharmacist's legal
obligation to not knowingly dispense prescriptions which lack a
legitimate medical purpose, see United States v. Hayes, 595 F.2d
258, 260-61 (5th Cir. 1979), and the red flags themselves are simply
factual circumstances which provide evidence to suspect that a
prescription was not issued for a legitimate medical purpose,
Respondent cannot claim that it has been denied fair notice that its
filling of the prescriptions at issue was unlawful.
---------------------------------------------------------------------------
Moreover, even prior to Respondent's first engaging in the
dispensing of controlled substances, this Agency had identified several
of the same red flags that are present here, such as the prescribing of
drug cocktails of narcotics (oxycodone), benzodiazepines (alprazolam),
and carisoprodol and patients obtaining large doses and multiple
prescriptions for narcotics. See Paul H. Volkman, 73 FR 30630, 30637
(2008) (discussing testimony of expert in pain management that
physician's practice of prescribing drug cocktails of opioids, which
often included multiple opioids, a benzodiazepine and carisoprodol,
``greatly increased the chance for drug abuse, diversion, [and]/or
addiction''); \33\ see also Your Druggist Pharmacy, 73 FR 75774, 75775
n.1 (2008) (discussing carisoprodol's use by drug abusers as a part of
a drug cocktail which also includes an opiate and benzodiazepine).
---------------------------------------------------------------------------
\33\ Indeed, the Government's Expert in Volkman discussed at
length six patients who received multiple controlled substance
prescriptions from the doctor and died of overdoses only a few days
later. See 73 FR at 30637 n.23.
---------------------------------------------------------------------------
Also, as discussed above, on October 27, 2010, the Agency
identified additional red flags in the East Main Street Pharmacy case
such as patients paying cash, patients travelling long distances to
obtain prescriptions, and patients obtaining prescriptions for
alprazolam in the two milligram dosage. To the extent Respondent
believes that it should be excused for its dispensing violations which
occurred prior to this date because no Agency decision had explicitly
found that these circumstances were red flags, the circumstances of
patients, who had traveled long distances and frequently from out-of-
state, presenting prescriptions for multiple controlled substances
including large quantities of oxycodone (and frequently prescriptions
for both 30 and 15 milligrams dosages), alprazolam 2mg, and at times
also carisoprodol, for which they paid large sums of cash (or cash
equivalents), created an obvious and compelling level of suspicion that
the prescriptions lacked a legitimate medical purpose. See Holiday CVS,
77 FR at 62322 (``[T]he red flags presented by the circumstances of
patients travelling from Kentucky or Tennessee to South Florida to
obtain prescriptions, including for a schedule II narcotic, which by
definition has the highest potential for abuse of any drug that may be
lawfully prescribed, and then travelling to Respondents to fill them,
are so obvious that only those who are deliberately ignorant would fill
these prescriptions.'') (citation omitted).\34\ Because I conclude that
these red flags rendered it obvious that the prescriptions likely
lacked a legitimate medical purpose, I reject Respondent's further
contention that ``the ALJ . . . improperly concluded that there was a
general knowledge of `red flags' among . . . independent pharmacies.''
Exceptions, at 29.
---------------------------------------------------------------------------
\34\ In this exception, Respondent also repeats its argument
that the Government's Expert ``provided no credible evidence that
the term [red flags] was known by pharmacists [sic] the State of
Florida other than her unsubstantiated testimony.'' Id. at 27.
Respondent also relies on the discredited testimony of its Expert to
the effect that the first reference she found on the Agency's
website to the term red flag was in the Holiday CVS decision and
that she did not believe that in 2010, such circumstances as
patients paying cash or traveling to obtain prescriptions was widely
known by pharmacists to be an indicator of abuse or diversion. Id.
at 28. I reject these arguments for the reasons explained in my
discussion of Respondent's exceptions to the ALJ's factual findings
and credibility determinations regarding the parties' experts.
---------------------------------------------------------------------------
Respondent further argues that the ALJ erred in ``credit[ing] the
DEA's argument that cash and high prices charged are evidence of
knowledge [on Ms. Jones's part] that her `acts were illegal.' '' Id.
According to Respondent, this ``argument turns the principles of due
process and burden of proof on their head,'' apparently because both
parties' Experts testified that there are no ``prohibitions of
pharmacies charging any particular price on controlled substances.''
Id. (citing Tr. 758).
Respondent, however, cites no authority for its contention.
Moreover, even granting that there are no prohibitions on the prices a
pharmacy can charge for controlled substances, when those prices far
exceed what other pharmacies would charge, the Agency may properly draw
the inference that
[[Page 79200]]
the pharmacy is charging those prices because it knows it is supplying
persons who are seeking the drugs to either abuse them or divert them
to others. See United States v. Leal, 75 F.3d 219, 223 (6th Cir. 1996)
(holding that evidence that pharmacist ``marked up controlled substance
prices 788% as compared to a national average of 86%'' supported
finding that pharmacist knew prescriptions were unlawful''); United
States v. Cooper, 868 F.2d 1505, 1512 (6th Cir. 1989) (evidence that
pharmacy charged prices well in excess of average prices supports an
inference that the pharmacist knew drugs were prescribed illegally);
Hayes, 595 F.2d at 261 (holding that evidence that ``the prices charged
by [pharmacist] for drugs were unusually high'' supported conclusion
that pharmacist ``knew that the prescriptions were not issued for a
legitimate medical purpose'').
Here, the evidence shows that Respondent was charging prices as
high as $1620 for 180 dosage units of oxycodone 30 mg when it paid
$58.66 for the drugs. See, e.g., GX 2 (line entries Nos. 3172, 3192,
3249). Moreover, the DOH Inspector, who had inspected approximately
1,500 pharmacies in Broward and Dade counties and who had 33 years of
experience as a practicing pharmacist, testified that the typical price
for 180 oxycodone 30 was ``less than $200'' and ``at most $250.'' Tr.
168. The Inspector further testified that the $1620 price Respondent
was charging at the time of the 2012 DOH Inspection was
``extraordinary'' and that ``in charging that amount of money,''
Respondent's owner knew the prescriptions were not issued for a
legitimate medical purpose. Id. at 167. I agree and I reject
Respondent's contention to the contrary.
Respondent's Contention That This Proceeding May Have Been Brought For
Punitive Reasons
Respondent further argues that ``the objective evidence indicates
that the instant action may have been brought for punitive reasons.''
Exceptions, at 30. As support for its contention, Respondent cites to
the evidence showing that in March 2012, Ms. Jones leased a new
location; that on June 2, 2012, she applied to change her registered
address to her new location; and that in both July and October 2012 she
had sent DEA Investigators the dispensing report (GX 2), but that DEA
did not approve the modification until April 2, 2013, several weeks
after Respondent's owner had written her congressional representatives
to complain about the delay. Id. at 30-33.
In its Exceptions, Respondent further quotes from Ms. Jones' letter
to her congressional representatives in which she asserted that ``I can
only think of negative reason of why someone would sit on our file so
long,'' that ``[i]t feels like an abuse of power for someone in this
position,'' and ``I feel this is an adult version of being bullied. I
am emailing and calling and I can't get any response on the status of
our application and why it is taking so long.'' RX 7 (quoted in
Exceptions, at 32-33). Noting that one of the Government's
Investigators testified that when he conducted the April 2, 2013
inspection, he was aware that Ms. Jones had sent this letter to her
congressional representatives, Respondent thus suggests that the
proceeding was brought to retaliate against Ms. Jones for complaining
to her representatives. Exceptions, at 32-33 & n.33.
I reject the contention that the proceedings were brought to
retaliate against Respondent's owner. Here, notwithstanding that Ms.
Jones engaged in constitutionally protected speech when she complained
to her congressional representatives, the Government's case for seeking
the revocation of Respondent's registration is amply supported by the
evidence showing that Respondent's pharmacists filled numerous
controlled substance prescriptions in violation of 21 CFR 1306.04(a)
thus rendering its registration inconsistent with the public interest.
In the related context of a Bivens action for a retaliatory criminal
prosecution, the Supreme Court has held that a plaintiff must show that
the prosecutor lacked probable cause. See Hartman v. Moore, 547 U.S.
250, 265-66 (2006); see United States v. Armstrong, 517 U.S. 456, 464
(1996) (holding that ``a presumption of regularity'' supports
prosecutorial decisionmaking, and where probable cause exists the
decision to bring a charge ``generally rests entirely'' in the
prosecutor's ``discretion'') (int. quotations and citations omitted).
Because there is no evidence in the record, other than Ms. Jones'
assertion, that the proceeding was brought to punish her for having
complained to her congressional representative, and because the case
against Ms. Jones is amply supported by the evidence in the record, I
reject her contention.
Respondent's Exception That the ALJ Failed To Consider Respondent's
Evidence as to Ms. Jones' Acceptance of Responsibility and Remedial
Actions
The ALJ further found ``that Ms. Jones has not unequivocally
accepted responsibility for'' the ``unlawful dispensing that occurred
at [Respondent] from 2010 [through] 2012.'' R.D. at 73. Based on this
finding, the ALJ applied Agency precedent which holds that a
registrant's acceptance of responsibility and showing that it has
undertaken adequate remedial measures are independent and ``essential
requirements for rebutting the Government's prima facie showing that
continuing an existing registration would be `consistent with the
public interest,''' and declined to consider Respondent's evidence of
remedial measures. Id. (citing Holiday CVS, 77 FR at 62346 (quoting 21
U.S.C. Sec. 823(f))).
Respondent takes exception to the ALJ's finding that Ms. Jones
failed to unequivocally accept responsibility for its misconduct. It
argues that the ALJ erred in concluding that Ms. Jones' testimony that
she believed ``that she was dispensing in accordance with appropriate
methods, demonstrates a lack of acceptance of responsibility.'' Id. at
33-34. Respondent argues that ``there is no specific language that is
required to `unequivocally accept responsibility'' because ``not all
individuals are the same and different individuals express themselves
in different ways.'' Id. at 34. Respondent then argues that ``Ms. Jones
repeatedly indicated that she accepted responsibility for her actions
that she felt bad in that she would not want to have done something to
hurt anyone.'' Id. Respondent further points to Ms. Jones' testimony
``that knowing what she knows now, she could have done more to
determine if prescriptions were written for legitimate purposes'' but
that ``she did not believe any of the prescriptions in 2010 that were
issued were not for legitimate medical purpose at that time . . .
[a]lthough knowing what she knows now, she concedes it is possible they
may not have been.'' Id. After discussing two older agency cases which
Respondent asserts stand for the proposition ``that there is no
specific way in which a party may accept responsibility,'' Respondent
all but acknowledges the insufficiency of its showing on this issue
when it argues that ``[i]n the instant action, there was substantial
evidence on the record that Ms. Jones equivocally took responsibility
for her actions.'' Exceptions, at 34-36 (emphasis added and citing
Barry H. Brooks, 66 FR 18305 (2001) and Mary Thomson, 65 FR 75969
(2000)).
While it is true that in these two cases the Agency granted
registrations to persons whose acceptance of responsibility was less
than unequivocal, in subsequent cases the Agency has made clear that
where the Government has proved that a registrant
[[Page 79201]]
has engaged in intentional or knowing misconduct, revocation is
warranted in the absence of the registrant's unequivocal acceptance of
responsibility for its misconduct. See Jayam Krishna-Iyer, 74 FR 459,
464 (2009). As the former Administrator explained:
While some isolated decisions of this Agency may suggest that a
practitioner who committed only a few acts of diversion was entitled
to regain his registration even without having to accept
responsibility for his misconduct, the great weight of the Agency's
decisions are to the contrary. . . . Because of the grave and
increasing harm to public health and safety caused by the diversion
of prescription controlled substances, even where the Agency's proof
establishes that a practitioner has committed only a few acts of
diversion, this Agency will not grant or continue the practitioner's
registration unless he accepts responsibility for his
misconduct.\35\
---------------------------------------------------------------------------
\35\ In Krishna-Iyer, the Agency further overruled any case to
the contrary. 74 FR at 464 n.9.
Id. See also Michael A. White, 79 FR 62957, 62958, 62967-68 (2014)
(adopting ALJ's finding that physician did not accept responsibility
when his ``acceptance of responsibility was tenuous at best,'' ``not
once during the hearing did [he] unequivocally admit fault for his
improper . . . prescriptions,'' and he ``minimized the severity of his
misconduct''); The Medicine Shoppe, 79 FR 59504, 59508-10 (2014)
(adopting ALJ's finding that pharmacy had not accepted responsibility
for its misconduct when its owner/pharmacist initially testified that
he accepted responsibility but on cross-examination denied ever having
filled an unlawful prescription notwithstanding proof to the contrary);
Holiday CVS, 77 FR at 62323 (rejecting challenge to ALJ finding that
pharmacy registrants had failed to acknowledge their misconduct when
corporate official testified only that company ``takes its
responsibility seriously, and given . . . the elevated level of drug
abuse that's being observed broadly in Florida, we don't want to
contribute to that'').\36\
---------------------------------------------------------------------------
\36\ The Agency's rule has been upheld on review. See MacKay v.
DEA, 664 F.3d 808, 820 (10th Cir. 2011) (``The DEA may properly
consider whether a physician admits fault in determining if the
physician's registration should be revoked. When faced with evidence
that a doctor has a history of distributing controlled substances
unlawfully, it is reasonable for the . . . Administrator to consider
whether that doctor will change his . . . behavior in the future.
And that consideration is vital to whether continued registration is
in the public interest.''); Chein v. DEA, 533 F.3d 828, 837 (D.C.
Cir. 2008) (upholding revocation of physician's registration based
on physician's failure to accept responsibility where physician
``continued [to] insist[] that his dispensing of anabolic steroids
to the undercover agents was proper''); Hoxie v. DEA, 419 F.3d 477,
483 (6th Cir. 2005).
---------------------------------------------------------------------------
Here, Respondent's evidence falls well short of the mark and even
putting aside the egregious nature and scope of Respondent's
misconduct, Ms. Jones' testimony establishes that she still does not
understand what her obligations are under the CSA. Notably, when asked
on cross-examination about specific sets of prescriptions, Ms. Jones
maintained that at the time she dispensed the prescriptions she thought
she was properly exercising her corresponding responsibility. Tr. 578-
79. She further denied that she had reason to believe the prescriptions
were not issued for a legitimate medical purpose, explaining that ``I
did what I had done at other pharmacies and I thought that was
enough.'' Id. Ms. Jones further testified that her process for checking
the legitimacy of the prescriptions was limited to ``calling the doctor
and verifying that the prescription was written by the office.'' \37\
Id. at 581.
---------------------------------------------------------------------------
\37\ Contrary to Ms. Jones' understanding, it has been settled
law for years that a pharmacist's obligations under the
corresponding responsibility rule requires more than just calling
the prescriber. As the Fifth Circuit has explained:
Verification by the issuing practitioner on request of the
pharmacist is evidence that the pharmacist lacks knowledge that the
prescription was issued outside the scope of professional practice.
But it is not an insurance policy against a factfinder's concluding
that the pharmacist has the requisite knowledge despite a purported
but false verification. . . . What is required by [a pharmacist] is
the responsibility not to fill an order that purports to be a
prescription but is not a prescription within the meaning of the
statute because he knows that the issuing practitioner issued it
outside the scope of medical practice.
United States v. Hayes, 595 F.2d 258, 261 (5th Cir. 1979). See
also United States v. Seelig, 622 F.2d 207, 213 (6th Cir. 1980)
(violation of 21 CFR 1306.04(a) ``may be inferred from proof that
[pharmacists] deliberately closed their eyes to what would otherwise
be obvious to them''); Medicine Shoppe-Jonesborough v. DEA, 300 Fed.
Appx. 409 (2008). And not only is ignorance of the law no excuse,
those who choose to participate in a highly regulated profession
cannot reasonably claim ignorance of the legal obligations imposed
on them as a practitioner in that profession. See David A. Ruben; 78
FR 38363, 38387 n.54 (2013); cf. Hageseth v. Superior Court, 59 Cal.
Rptr.3d 385, 403 (Ct. App. 2007).
---------------------------------------------------------------------------
While Ms. Jones further testified that ``[k]nowing what I know
today, I think I could have done more digging to test the legitimacy of
the prescriptions,'' id. at 583, she then explained that ``there are
doctors who will still write prescriptions like this and who are still
practicing. So, I feel like we have to be the police of the legitimacy
of the prescriptions, even though that should be their responsibility
to make sure legitimate prescriptions are written based on the
diagnosis of the patient.'' Id. at 585 (emphasis added).
Throughout the cross-examination, Ms. Jones continued to maintain
her belief that she had complied with her obligations under 21 CFR
1306.04(a) when she filled the prescriptions while denying that she had
any obligation to do anything other than call the doctor's office. For
example, when asked if her ``due diligence include[d] assessing
whether'' the prescriptions in Government Exhibit 17 and 45 \38\ (which
were presented by two persons who provided the same address in
Tennessee and were for three controlled substances) were issued ``for
legitimate medical purposes,'' Ms. Jones answered: ``Well we call the
office to verify the prescription and to make sure it was valid. I
disagree with what you're saying that we didn't make sure that the
prescription was legitimate. I don't agree to that. I'm sorry, I
don't.'' Tr. 593-94. When then asked whether there was ``reason to
believe that'' the prescriptions were not issued for a legitimate
medical purpose, Ms. Jones answered:
---------------------------------------------------------------------------
\38\ These prescriptions were obtained by two patients (D.H. and
K.S.) who provided the same residence address in Harriman, Tennessee
and obtained prescriptions on same day (on two occasions) from a
clinic in Opa Locka which Respondent filled for oxycodone 30 (three
of the prescriptions being for 180 du, one being for 150 du),
oxycodone 15 (all four prescriptions being for 90 du), and
alprazolam 2 (all four prescriptions being for 60 du). GXs 17, 45.
D.H. and K.S. paid for each prescription with cash. GX 45, at 2.
At face value of the prescription, no, because they're actual
medications. They're written by a doctor. I've done a lot of
training. Pain is what the patient says it is. Someone can, I have a
patient who has sickle cell and has told me he's went to the
hospital and sat there and waited and they asked him what his pain
level was and he told them ten and it wasn't until they took his
vitals that they actually believed him. So, I don't think you could
look at someone to say you're not in pain and that's not a
---------------------------------------------------------------------------
legitimate prescription.
Id. at 595. However, even if a pharmacist cannot look someone in the
eye and determine whether she is actually in pain, a pharmacist can
certainly evaluate the likelihood that prescriptions are legitimate
when two patients, who provided the same address in Tennessee,
presented essentially identical prescriptions for large quantities of
oxycodone 30 and 15, as well as alprazolam 2, which they obtained from
the same doctors, paid cash for the prescriptions and just happened to
drop by her pharmacy to fill the prescriptions.
Next, the Government pursued the same line of questioning regarding
the 49 prescriptions which were presented by 22 patients and filled by
Respondent on April 19 and 20, 2010. Tr. 596; GXs 46 and 18. Of note,
none of the 22
[[Page 79202]]
patients who filled these controlled substance prescriptions was from
Florida. Rather, the patients were from Ohio, West Virginia, Georgia,
Tennessee, Kentucky, and Mississippi. Moreover, 40 of the prescriptions
were written by Dr. Wolff of Deerfield Beach, who registration was
revoked by this Agency following a hearing at which he was found to
have violated 21 CFR 1306.04(a).\39\ Each of the patients filled a
prescription for oxycodone 30, with sixteen of the patients obtaining
180 dosage units or more, fourteen of the patients also obtained
prescriptions for alprazolam 2mg, and thirteen of the patients also
obtained a third prescription for oxycodone 15. See GX 46. Moreover,
each of the patients paid cash for their prescriptions. Id. at 3-4.
Here, as well, these out-of-state patients just happened to know to go
to Respondent, out of all the pharmacies in South Florida, and which
had been opened for just over two months, to fill their
prescriptions.\40\
---------------------------------------------------------------------------
\39\ The other nine prescriptions were written by a doctor in
Miami. GX 46, at 12.
\40\ A review of the spreadsheet of Respondent's controlled
substance dispensings shows that even in the initial months of its
dispensing activity, filling prescriptions for persons who provided
non-Florida addresses predominated over filling prescriptions for
Florida residents. For example, from February 15, 2010 through the
end of May 2010, Respondent filled 706 controlled substance
prescriptions for persons who provided a non-Florida address and
only 152 prescriptions for Florida residents. See GX 2 (line entries
2-706). Indeed, between February 15 and March 12, 2010 (its first
month of dispensing as no dispensings occurred on March 13-14), it
filled controlled substance prescriptions for 42 persons who
provided addresses in Kentucky, Ohio, West Virginia, Tennessee, and
North Carolina but only eight Florida residents. Id. (line entries
2-102). With the exception of three carisoprodol prescriptions, the
prescriptions were comprised entirely of oxycodone in both 30 and 15
milligram dosage forms and alprazolam in either the 2 or 1 milligram
dosage form. Of the patients who filled controlled substance
prescriptions at Respondent during its first month of dispensing, 43
of them obtained prescriptions for oxycodone 30 and each paid cash.
---------------------------------------------------------------------------
Asked whether she thought she was exercising her corresponding
responsibility to ensure that these prescriptions were issued for a
legitimate medical purpose, Ms. Jones testified: ``I think I was at the
time, yes.'' Tr. 599. When subsequently asked if she ``understand[s]s
those responsibilities differently today,'' Ms. Jones answered:
Differently today--differently in the sense of I can do more;
differently, no, in the sense if the prescription is written by the
prescriber, I don't think it makes it an illegitimate, not a
legitimate prescription for medical purposes. I think I can do more
digging to make sure that the patient is going to use it
appropriately and not make it so that somebody else has access to
it. I do that by looking at their history that the inspector made me
aware of in August of 2014, but I still do rely on the prescriber to
write prescriptions for legitimate medical purposes.
Id. at 599-600. Here again, notwithstanding the obvious and compelling
evidence that the prescriptions lacked a legitimate medical purpose,
Respondent continued to deny that the prescriptions were unlawfully
dispensed.\41\
---------------------------------------------------------------------------
\41\ Asked about additional sets of prescriptions, Ms. Jones
adhered to the same theme that she believed that when she filled the
prescriptions she properly exercised her corresponding
responsibility, but today, she ``would do more digging.'' Tr. 606.
She did so no matter how strong the indicia of suspicion were with
respect to the prescriptions, such as when she was asked about an
oxycodone prescription that cost her $58.56 and for which she
charged the patient $1620. Id. at 611-12.
---------------------------------------------------------------------------
Moreover, at other points in her testimony, Ms. Jones left no doubt
that she still does not understand her obligations under 21 CFR
1306.04(a). To be sure, Ms. Jones testified that she ``would shy away''
from filling a prescription for a patient who is paying cash. Id. at
623. However, when then asked if she ``believe[s] there are
circumstances where a pharmacist should refuse to fill a prescription
after making the judgment that it is not issued for [a] legitimate
medical purpose,'' she testified:
That still leaves us diagnosing whether the patient has pain or
not. I wouldn't say for legitimate medical purpose. I would say by
looking at the totality of what the situation is and as much
information as you can collect and then deciding if you're okay, if
you feel comfortable filling it or not.
Id. at 624. While on further questioning Ms. Jones testified that
``[t]here are circumstances that would cause me to reject a
prescription,'' she then added that ``I don't think I can make the
determination whether it's for legitimate medical purposes because I
would have to say that I'm in that person's body and I know how they
feel if we're just speaking about pain medications.'' Id. at 625. And
subsequently, Ms. Jones testified that with respect to pain
medications, ``I might question the quantity, maybe the duration, but
for legitimate medical purpose, that would lead me into me having to
diagnose because I'm someone who will give recommendations and tell you
what I think, but I can't, I don't think it's a fair statement that you
could say someone is not in pain.'' Id. at 628.\42\
---------------------------------------------------------------------------
\42\ The federal courts have also rejected this view. As the
Fifth Circuit has further explained: `` `a pharmacist can fulfill
[her] responsibility under [21 CFR] 1306.04 without practicing
medicine. . . . [A] pharmacist can know that prescriptions are
issued for no legitimate medical purpose without [her] needing to
know anything about medical science.' '' United States v. Henry, 727
F.2d 1373, 1378 (5th Cir. 1984) (quoting Hayes, 595 F.2d at 261
n.6).
---------------------------------------------------------------------------
Subsequently, Ms. Jones was asked after if she understood her
corresponding responsibility under the Controlled Substances Act. Id.
at 639. Ms. Jones answered:
Well, I understand that I have a responsibility to make sure
that patients are safe with the medication they receive. But, you,
you're saying medical legitimacy. The law is saying that we had a--
to make sure it says medical, it's--the law says medical legitimacy?
That's what I'm not understanding.
Id.
When then asked whether she knew ``one way or another'' if she had
a corresponding responsibility, Ms. Jones answered: ``I did not know
that the law said that I had to make sure that prescriptions said it
was legitimate, medically legitimate.'' Id. at 639-40. Ms. Jones then
admitted that she did not know this even while ``sitting here today.''
Id. at 640. When then asked for her ``understanding of what the law
requires of . . . a pharmacist [who] dispens[es] controlled
substances,'' Ms. Jones testified ``that I need to make sure that the
patients are safe and that I need to make sure that the prescription is
a, a true and correct prescription. That's my understanding of my
responsibilities.'' Id. at 640-41. And when asked if she has ``any
responsibility to ensure that the prescription is issued for a
legitimate medical purpose,'' Ms. Jones testified: ``I thought that was
the prescriber's responsibility. The person actually writing the
prescription.'' Id. at 641.
Thereafter, Ms. Jones was asked whether she ``acknowledge[s]'' that
she did not exercise her responsibility to ensure that that
prescriptions at issue ``were issued for a legitimate medical
purpose?'' Id. at 642. Ms. Jones answered: ``[i]n my scope of what I
did I, that was not a part of what I was doing anyway if that makes
sense. That was not something that I thought was my responsibility to
make sure they were medically legitimate.'' Id. Indeed, when asked
whether there was any category of the prescriptions discussed in the
hearing that she thought were medically legitimate, Ms. Jones replied:
``I can't say that they weren't medically legitimate because I didn't
have conversations with the patients. So, I can't say that they were or
were not.'' Id. at 646.
The ALJ was not impressed by Ms. Jones' testimony. As the ALJ
explained:
Ms. Jones purported to accept responsibility for [Respondent's]
dispensing practices by repeatedly asserting that she did
[[Page 79203]]
what she knew at the time, but now she knows she could have done
more. But then Ms. Jones demonstrated by her statements that she
does not fully understand her corresponding responsibility even yet
today. Thus, there remains no excuse for the Respondent's past
dispensing conduct and continued lack of knowledge of [her and her
pharmacists'] corresponding responsibility. . . .
R.D. 72-73 (citing 21 CFR 1306.04(a)).
I agree. And because Respondent has not credibly accepted
responsibility for its misconduct, the ALJ did not err when she
declined to consider Respondent's evidence of its remedial measures.
See R.D. at 73 (citing cases).
As found above, the evidence shows that Respondent filled nearly
3,300 controlled substance prescriptions, the vast majority of which
presented such compelling evidence that the prescriptions lacked a
legitimate medical purpose as to support a finding that Respondent's
pharmacists either knew or were willfully blind to the fact that the
prescriptions were issued in violation of 21 CFR 1306.04(a). Given the
scope and duration of Respondent's misconduct, Ms. Jones' failure to
acknowledge its misconduct, as well as Ms. Jones' testimony which
demonstrates that notwithstanding this proceeding, she still does not
understand the scope of a pharmacist's obligations under the CSA, I
have no confidence that either of Ms. Jones' entities (Total Health
Pharmacy, L.L.C., and SND Healthcare, L.L.C.) will faithfully comply
with the CSA if it was granted a registration.\43\ Accordingly, I
reject Respondent's exceptions and will adopt the ALJ's recommendation
that I deny the application of Jones Total Health Pharmacy, L.L.C., to
renew its registration and the application of SND Healthcare, L.L.C.,
for a registration. See R.D. at 75.
---------------------------------------------------------------------------
\43\ Indeed, this is a case where the proven misconduct is so
extensive and egregious that even if the ALJ had found that Ms.
Jones had credibly accepted responsibility (and given weight to the
evidence of remedial measures), I still would have concluded that
allowing Respondents to be registered ``would be inconsistent with
the public interest.'' 21 U.S.C. Sec. Sec. 823(f) and 824(a)(4).
See also Hatem M. Ataya, 81 FR 8221, 8244 (2016) (``[W]hile
proceedings under 21 U.S.C. Sec. Sec. 823 and 824 are remedial in
nature, there are cases in which, notwithstanding a finding that a
registrant has credibly accepted responsibility, the misconduct is
so egregious and extensive that the protection of the public
interest nonetheless warrants the revocation of a registration or
the denial of an application.'') (citing Fred Samimi, 79 FR18698,
18714 (2014)).
---------------------------------------------------------------------------
Order
Pursuant to the authority vested in me by 21 U.S.C. Sec. 823(f)
and 28 CFR 0.100(b), I order that the application of Jones Total Health
Pharmacy, L.L.C., for a DEA Certificate of Registration as a retail
pharmacy be, and it hereby is, denied. I further order that the
application of SND Healthcare, L.L.C., for a DEA Certificate of
Registration as a retail pharmacy be, and it hereby is, denied. This
Order is effective immediately.
Date: October 31, 2016.
Chuck Rosenberg,
Acting Administrator.
Dana Hill, Esq., for the Government.
Daniel S. Newman, Esq., for the Respondent.
Findings of Fact, Conclusions of Law, and Recommended Decision
I. Introduction
Administrative Law Judge Gail A. Randall. This proceeding is an
adjudication governed by the Administrative Procedure Act, 5 U.S.C.
Sec. Sec. 551 et. seq., to determine whether the Drug Enforcement
Administration (``DEA'') should deny a pharmacy's application, and
revoke an associated pharmacy's registration with pending applications
for renewal of such registration denied under the Controlled Substances
Act, 21 U.S.C. Sec. Sec. 824(a)(4) and 823(f).
II. Procedural Background
The Deputy Assistant Administrator, Drug Enforcement Administration
(``DEA'' or ``Government''), issued an Order to Show Cause (``Order'')
dated October 6, 2014, proposing to deny the application, number
W13031979A, for SND Healthcare, LLC, (``SND''), pursuant to 21 U.S.C.
Sec. 823(f), and to revoke the DEA Certificate of Registration, number
FJ1733725 for Jones Total Health Pharmacy, LLC, (``Jones
Pharmacy''),\44\ pursuant to 21 U.S.C. Sec. 824(a)(4), because the
registration of each entity is inconsistent with the public interest,
as that term is defined in 21 U.S.C. Sec. 823(f).\45\ [Administrative
Law Judge Exhibit (``ALJ Exh.'') 1].
---------------------------------------------------------------------------
\44\ The Order to Show Cause in this matter refers to a Jones
Total Health Care Pharmacy, but the DEA certificate of registration
history documents indicate the pharmacy's name as Jones Total Health
Pharmacy. [cf. ALJ Exh 1 with Gov't Exh. 8]. DI Gonzales testified
at the hearing that the Order to Show Cause misstated Jones
Pharmacy's name. [Tr. 111-112]. Therefore, the correct full name of
the entity involved in this matter is Jones Total Health Pharmacy,
LLC. [Tr. 112; Gov't Exh. 8].
\45\ SND Healthcare, LLC, and Jones Total Health Pharmacy, LLC,
together will be referred to as ``Respondents.''
---------------------------------------------------------------------------
On November 5, 2014, the Respondents, through counsel, timely filed
a request for a hearing in the above-captioned matter. [ALJ Exh. 2].
I, Gail A. Randall, Administrative Law Judge, have been designated
as the presiding officer in the above-captioned case.
On January 14, 2015, a Protective Order was issued in this matter.
[ALJ Exh. 17]. Upon joint request, I issued my Order Modifying The
Protective Order on January 30, 2015. [ALJ Exh. 18].
On January 12, 2015, I issued a Prehearing Ruling, which includes
the parties' stipulations. [ALJ Exh. 16]. On February 4, 2015, I issued
the Notice of Hearing, informing both parties of the time and place for
the hearing. [ALJ Exh. 20].
The hearing was conducted in this matter on March 3, 2015 through
March 6, 2015, at the Miami Dade Courthouse, Miami, Florida. [Id].
On April 20, 2015, the Government filed its Proposed Findings of
Fact and Conclusions of Law (``Govt. Brief''). Also on April 20, 2015,
the Respondents filed their Proposed Findings of Fact and Conclusions
of Law (``Resp. Brief'').
III. Issues
The issues in this proceeding are:
(1) Whether the record as a whole establishes by a preponderance of
the evidence that the Drug Enforcement Administration (``DEA'' or
``Government'') should revoke the DEA Certificate of Registration,
number FJ1733725, of Jones Total Health Care Pharmacy as a retail
pharmacy, pursuant to 21 U.S.C. Sec. 824(a) (2006), and deny any
pending applications for renewal or modification of such registration,
pursuant to 21 U.S.C. Sec. 823(f) (2006), because its continued
registration would be inconsistent with the public interest, as that
term is defined in 21 U.S.C. Sec. 823(f).
(2) Whether or not the record as a whole establishes by a
preponderance of the evidence that the DEA should deny the application,
number W13031979A for a DEA Certificate of Registration for SND
Healthcare, LLC, as a retail pharmacy pursuant to 21 U.S.C. Sec.
823(f), because to grant its application would be inconsistent with the
public interest, as that term is defined in 21 U.S.C. Sec. 823(f).
[ALJ Exh. 16; Tr. 6].
IV. Findings of Fact
I find by a preponderance of the evidence the following facts:
A. Stipulated Facts
1. Stipulations About Controlled Substances Dispensed to B.F. and K.W.
1. On February 17, 2010, Jones Pharmacy dispensed 240 tablets of
Oxycodone HCL 30 mg, 30 tablets of
[[Page 79204]]
Xanax 2 mg, and 120 tablets of Carisoprodol 350 mg to B.F.
2. On February 17, 2010, Jones Pharmacy dispensed 240 tablets of
Oxycodone HCL 30 mg, 30 tablets of Xanax 2 mg, and 180 tablets of
Oxycodone HCL 15 mg to K.W.
3. On March 17, 2010, Jones Pharmacy dispensed 240 tablets of
Oxycodone HCL 30 mg, 180 tablets of Oxycodone HCL 15 mg, 60 tablets of
Carisoprodol 350 mg, and 30 tablets of Xanax 2 mg to B.F.
4. On March 17, 2010, Jones Pharmacy dispensed 240 tablets of
Oxycodone HCL 30 mg, 180 tablets of Oxycodone HCL 15 mg, and 30 tablets
of Xanax 2 mg to K.W.
5. On April 14, 2010, Jones Pharmacy dispensed 240 tablets of
Oxycodone HCL 30 mg, 180 tablets of Oxycodone HCL 15 mg, 60 tablets of
Carisoprodol 350 mg, and 30 tablets of Xanax 2 mg to B.F.
6. On April 14, 2010, Jones Pharmacy dispensed 240 tablets of
Oxycodone HCL 30 mg, 180 tablets of Oxycodone HCL 15 mg, and 30 tablets
of Xanax 2 mg to K.W.
2. Stipulations About Controlled Substances Dispensed to L.S. and J.S.
7. On March 12, 2010, Jones Pharmacy dispensed 210 tablets of
Roxicodone (Oxycodone HCL) 30 mg, 90 tablets of Roxicodone 15 mg, and
75 tablets of Xanax 2 mg to L.S.
8. On March 12, 2010, Jones Pharmacy dispensed 210 tablets of
Roxicodone 30 mg, 90 tablets of Roxicodone 15 mg, and 75 tablets of
Xanax 2 mg to J.S.
9. On April 9, 2010, Jones Pharmacy dispensed 210 tablets of
Roxicodone 30 mg and 90 tablets of Roxicodone 15 mg to L.S.
10. On April 9, 2010, Jones Pharmacy dispensed 210 tablets of
Roxicodone 30 mg and 90 tablets of Roxicodone 15 mg to J.S.
11. On May 6, 2010, Jones Pharmacy dispensed 210 tablets of
Roxicodone 30 mg, 90 tablets of Roxicodone 15 mg, and 60 tablets of
Xanax 2 mg to L.S.
12. On May 6, 2010, Jones Pharmacy dispensed 180 tablets of
Roxicodone 30 mg, 90 tablets of Roxicodone 15 mg, and 60 tablets of
Xanax 2 mg to J.S.
13. On June 2, 2010, Jones Pharmacy dispensed 180 tablets of
Roxicodone 30 mg, 90 tablets of Roxicodone 15 mg, and 60 tablets of
Xanax 2 mg to L.S.
14. On June 2, 2010, Jones Pharmacy dispensed 180 tablets of
Roxicodone 30 mg, 90 tablets of Roxicodone 15 mg, and 60 tablets of
Xanax 2 mg to J.S.
3. Stipulations About Controlled Substances Dispensed to D.H. and K.S
15. On April 13, 2010, Jones Pharmacy dispensed 150 tablets of
Oxycodone HCL 30 mg, 90 tablets of Oxycodone HCL 15 mg, and 60 tablets
of Alprazolam 2 mg to D.H.
16. On April 13, 2010 Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg, 90 tablets of Oxycodone HCL 15 mg, and 60 tablets
Alprazolam 2 mg to K.S.
17. On May 17, 2010, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg, 90 tablets of Oxycodone HCL 15 mg, and 60 tablets
of Alprazolam 2 mg to D.H.
18. On May 17, 2010, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg, 90 tablets of Oxycodone HCL 15 mg, and 60 tablets
of Alprazolam 2 mg to K.S.
4. Stipulations About Controlled Substances Dispensed on April 19 and
20
19. On April 19, 2010, Jones Pharmacy dispensed 210 tablets of
Oxycodone HCL 30 mg to J.C.
20. On April 19, 2010, Jones Pharmacy dispensed 210 tablets of
Oxycodone HCL 30 mg to S.H.
21. On April 19, 2010, Jones Pharmacy dispensed 210 tablets of
Oxycodone HCL 30 mg to C.L.
22. On April 19, 2010, Jones Pharmacy dispensed 210 tablets of
Oxycodone HCL 30 mg to J.B.
23. On April 19, 2010, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg to J.S.
24. On April 19, 2010, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg to C.H.
25. On April 19, 2010, Jones Pharmacy dispensed 210 tablets of
Oxycodone HCL 30 mg, 90 tablets of Oxycodone HCL 15 mg, and 60 tablets
of Alprazolam 2 mg to J.A.
26. On April 19, 2010, Jones Pharmacy dispensed 210 tablets of
Oxycodone HCL 30 mg, 90 tablets of Oxycodone HCL 15 mg, and 60 tablets
of Alprazolam 2 mg to M.T.
27. On April 20, 2010, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg, 30 tablets of Oxycodone HCL 15 mg, 30 tablets of
Endocet 10/650 mg, and 30 tablets of Alprazolam 2 mg to R.F.
28. On April 20, 2010, Jones Pharmacy dispensed 60 tablets of
Oxycodone HCL 15 mg and 30 tablets of Alprazolam 2 mg to S.F.
29. On April 20, 2010, Jones Pharmacy dispensed 150 tablets of
Oxycodone HCL 30 mg, 60 tablets of Oxycodone HCL 15 mg, and 30 tablets
of Alprazolam 2 mg to S.T.
30. On April 20, 2010, Jones Pharmacy dispensed 150 tablets of
Oxycodone HCL 30 mg and 30 tablets of Alprazolam 2 mg to J.K.
31. On April 20, 2010, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg, 60 tablets of Oxycodone HCL 15 mg, and 30 tablets
of Alprazolam 2 mg to G.O.
32. On April 20, 2010, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg to J.T.
33. On April 20, 2010, Jones Pharmacy dispensed 150 tablets of
Oxycodone HCL 30 mg, 60 tablets of Oxycodone HCL 15 mg, and 60 tablets
of Alprazolam 2 mg to B.C.
34. On April 20, 2010, Jones Pharmacy dispensed 20 tablets of
Oxycodone HCL 30 mg to E.C.
35. On April 20, 2010, Jones pharmacy dispensed 150 tablets of
Oxycodone HCL 30 mg, 60 tablets of Oxycodone HCL 15 mg, and 60 tablets
of Alprazolam 2 mg to J.H.
36. On April 20, 2010, Jones Pharmacy dispensed 120 tablets of
Oxycodone HCL 30 mg, 60 tablets of Oxycodone HCL 15 mg, and 30 tablets
of Alprazolam 2 mg to M.R.
37. On April 20, 2010, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg, 120 tablets of Oxycodone HCL 15 mg, and 60 Tablets
Alprazolam 2 mg to R.J.
38. On April 20, 2010, Jones Pharmacy dispensed 200 tablets of
Oxycodone HCL 30 mg, 100 tablets of Oxycodone HCL 15 mg, and 75 tablets
of Alprazolam 2 mg to J.D.
39. On April 20, 2010, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg, 90 tablets of Oxycodone HCL 15 mg, and 30 tablets
of Alprazolam 2 mg to L.N.
40. On April 20, 2010, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg, 90 tablets of Oxycodone HCL 15 mg, and 60 tablets
of Alprazolam 2 mg to A.T.
5. Stipulations About Controlled Substances Dispensed to R.H.
41. On October 26, 2010, Jones Pharmacy dispensed 90 tablets of
Carisoprodol 350 mg, 180 tablets of Oxycodone HCL 30 mg, and 112
tablets of Oxycodone-APAP 10/325 mg to R.H.
6. Stipulations About Controlled Substances Dispensed to D.T.
42. On February 28, 2011, Jones Pharmacy dispensed 107 tablets of
Oxycodone HCL 30 mg, 41 tablets of Oxycodone HCL 15 mg, and 30 tablets
of Xanax 2 mg to D.T.
[[Page 79205]]
7. Stipulations About Controlled Substances Dispensed to R.C., J.C.,
and T.M.
43. On July 27, 2011, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg and 30 tablets of Xanax 2 mg to R.C.
44. On July 27, 2011, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg and 30 tablets of Xanax 2 mg to J.C.
45. On July 27, 2011, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg and 30 tablets of Xanax 2 mg to T.M.
8. Stipulations About Controlled Substances Dispensed to M.H., J.R.,
and W.F.
46. On August 1, 2011, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg and 30 tablets of Xanax 2mg to M.H.
47. On August 1, 2011, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg and 30 tablets of Xanax 2 mg to J.R.
48. On August 2, 2011, Jones Pharmacy dispensed 180 tablets of
Oxycodone HCL 30 mg and 30 tablets of Xanax 2 mg to W.F.
9. Stipulations About Controlled Substances Dispensed to D.O.
49. On May 4, 2012, Jones Pharmacy dispensed 30 tablets of
Clonazepam 1 mg and 180 tablets of Dilaudid (Hydromorphone) 8 mg to
D.O.
50. On July 2, 2012, Jones Pharmacy dispensed 30 tablets of
Clonazepam 1 mg and 180 tablets of Roxicodone HCL 30 mg to D.O.
10. Stipulations About Controlled Substances Dispensed to M.S./S.M \46\
---------------------------------------------------------------------------
\46\ The parties agree on the stipulations related to the
patient in question. There is some conflicting documentary evidence
as to the ordering of this patient's first and last names.
---------------------------------------------------------------------------
51. On January 11, 2012, Jones Pharmacy dispensed 180 tablets of
Oxycodone 30 mg to M.S./S.M.
52. On February 8, 2012, Jones Pharmacy dispensed 180 tablets of
Oxycodone 30 mg to M.S./S.M.
53. On March 7, 2012, Jones Pharmacy dispensed 180 tablets of
Oxycodone 30 mg to M.S./S.M.
54. On April 4, 2012, Jones Pharmacy dispensed 180 tablets of
Oxycodone 30 mg to M.S./S.M.
55. On May 1, 2012, Jones Pharmacy dispensed 180 tablets of
Oxycodone 30 mg to M.S./S.M.
56. On May 29, 2012, Jones Pharmacy dispensed 180 tablets of
Oxycodone 30 mg to M.S./S.M.
57. On June 26, 2012, Jones Pharmacy dispensed 180 tablets of
Oxycodone 30 mg to M.S./S.M.
11. Stipulations About Jones Pharmacy's Dispensing of Controlled
Substances as Enumerated in the Order to Show Cause.
58. The prescriptions enumerated in the Order to Show Cause were
issued and filled in the time period of February 15, 2010 through July
3, 2012.
59. There are no prescriptions enumerated in the Order to Show
Cause that were issued or filled after July 3, 2012.
60. The controlled substances dispensed by Jones enumerated in the
order to Show Cause were prescribed by physicians who were licensed to
practice medicine in Florida at the time the prescriptions were written
61. The controlled substances referenced in Stipulations 1-57 were
prescribed by physicians who were licensed to practice medicine in
Florida at the time the prescriptions were written. [ALJ Exh. 21].
B. DEA Investigation
62. Domingo Gonzales is a Diversion Investigator (``DI'') who has
worked for the DEA for two and a half years. [Transcript (``Tr.'') 25].
DI Gonzales works at the Miami Field Division in Miami, Florida. [Id.].
DI Gonzales has completed between 15-20 pharmacy inspections during his
tenure with the DEA. [Tr. 26-27]. DI Gonzales was tasked with
conducting an onsite inspection of Jones Total Health Pharmacy in April
of 2013. [Tr. 27].
63. Group Supervisor Gayle Lane is a Miami Diversion Group
Supervisor who has worked for the DEA for 38 years. [Tr. 115-117].
Group Supervisor Lane supervises six Diversion Investigators conducting
investigations of pharmaceutical drug diversion. [Tr. 115]. Group
Supervisor Lane's supervisory territory includes Monroe, Miami Dade,
and Broward counties. [Tr. 116]. Recently Group Supervisor Lane has
also done investigations in the Fort Meyers and Naples area. [Tr. 116].
In the last five years, Group Supervisor Lane has conducted close to
200 investigations. [Tr. 117]. Group Supervisor Lane testified that the
DEA DI's look for red flags such as people coming in to the pharmacy at
the same time with identical prescriptions from the same doctor, or
exorbitant prices for controlled substances. [Tr. 124-125].\47\
Exorbitant prices would indicate abuse or diversion because normally
``people pay with insurance. And these type of narcotics don't cost
that much money, so that is usually an indication that the patient and
the pharmacist know that these drugs are going to be diverted, that
they'd be willing to pay more than $1,000 for one prescription, for
instance.'' [Tr. 125]. Group Supervisor Lane assigned the Jones
Pharmacy case to DI Gonzales. [Tr. 122].
---------------------------------------------------------------------------
\47\ As a caveat, Group Supervisor Lane also testified that she
did not have any personal knowledge of the controlled substances
listed in the Order to Show Cause being diverted by the individuals
to whom they were dispensed to. [Tr. 140].
---------------------------------------------------------------------------
64. Brian Curtis is a Diversion Investigator who works for the DEA
in the Miami Field Division. [Tr. 148]. DI Curtis filled in for
Investigator Gonzales when DI Gonzales was on military leave. [Tr. 148-
149]. DI Curtis was asked to assist with pulling prescriptions, and
providing them to the pharmacist expert, Dr. Gordon, for review. [Tr.
149].
65. DI Curtis pulled all of the prescriptions for the respective
customers indicated in Government Exhibits 15-24. [Gov't Exh. 15-24].
C. Florida Department of Health Inspector Mary Crane
66. Mary Crane is a Pharmacy Inspector for the Florida Department
of Health who works in Broward County and Dade County, Florida. [Tr.
159]. Ms. Crane inspects pharmacies for compliance with the laws and
rules of the State of Florida and for a pharmacy's adherence to federal
laws as well. [Tr. 159]. Ms. Crane also checks to ensure that
pharmacies are operating in a clean and safe manner, and that they
comply with the standards of practice in Florida. [Tr. 160]. In the
past three and a half years, Ms. Crane has completed close to 1,500
pharmacy inspections in Broward County and Dade County. [Tr. 160].
Before she was a pharmacy inspector, Ms. Crane practiced retail
pharmacy for 33 years. [Tr. 161].
67. When Ms. Crane inspects prescriptions in the course of her
duties, she looks for red flags. [Tr. 162]. In determining whether a
red flag is present on a prescription, Ms. Crane looks at the pattern
of prescribing, the profile of the patient to see if there is a
progression from a low to high dose, other medications the individual
is taking, type of physician that wrote the prescription, and other
factors such as the patient's age, type of medication, and whether or
not the prescription was purchased with cash. [Tr. 162]. Ms. Crane
further testified that there is not a definitive list of things a
pharmacist is supposed to check. [Tr. 163]. Ms. Crane stated that the
concept of ``red
[[Page 79206]]
flags,'' not the term, has been present for her entire tenure as a
pharmacist, 36 years. [Tr. 206, 210].
68. In 2012, Ms. Crane inspected Jones Pharmacy. [Tr. 164]. Ms.
Jones told Ms. Crane that she was moving her pharmacy because she was
going to be compounding creams for the Miami Heat basketball team, and
needed a store that looked better in a better area. [Tr. 167, 451,
671].
69. During the inspection, Ms. Crane found that the majority of
Jones' business was for Schedule II controlled substances which the
pharmacy was filling for cash. There was little of the business that
was for non-controlled substances. [Tr. 164]. Ms. Crane noted that when
she drove up to Jones pharmacy ``people were loitering in the parking
lot. It was not in a really nice area, and I was a little bit, when I
got out of my car, kind of looked around.'' [Tr. 164]. During her
discussion with Ms. Jones about the pharmacy's proposed move, Ms. Crane
told Ms. Jones ``you need to leave these pill seekers at the old store
because that clientele will not come if you have a lot of people
hanging around that want narcotics.'' [Tr. 167].
70. Pursuant to her inspection, Ms. Crane filled out an inspection
form. [Tr. 165-166; Gov't Exh 12]. Ms. Jones signed the first page of
the report, but the second page including Ms. Cranes' remarks was not
provided to Ms. Jones. [Tr. 165, 181-182; Gov't Exh 12]. Ms. Crane
wrote that the ``primary business of the pharmacy is the cash sale of
narcotics.'' [Tr. 166-167]. Ms. Crane also annotated in her report that
Jones Pharmacy sold a 180 pill prescription for $1,620. [Tr. 167]. Ms.
Crane said that a more reasonable price to pay for this type of
prescription would be $200-$250. [Tr. 168]. Ms. Crane stated that the
``extraordinary price that people were paying cash for that
prescription stood out to [her], that not only were the prescriptions .
. . not [written] for [a] legitimate means but that [Ms. Jones] knew it
in charging that amount of money.'' [Tr. 167]. Ms. Crane did not note
any deficiencies with Ms. Jones' biennial inventory. [Tr. 185-186].
71. Ms. Crane testified that high prices were an indicator of abuse
and/or diversion because addicts will often sell part of their
prescription in order to pay the exorbitant amount of money the addicts
paid to purchase the prescription. [Tr. 169-170]. Ms. Crane also
testified that she never prepared a written analysis regarding the
prevailing prices of controlled substances that were sold during the
period February 2010 through July 2012. [Tr. 181]. Nor was Ms. Crane
aware of the prices Ms. Jones paid per pill for Oxycodone 30 mg in June
of 2012. [Tr. 183].
72. During Ms. Crane's inspection of Jones Pharmacy in August 2014,
she asked Ms. Jones to produce a drug utilization report. [Tr. 174;
Gov't Exh 14]. The drug utilization report Ms. Jones produced listed
the drugs Jones Pharmacy had dispensed by NDC number, and it also had
the total number of units the pharmacy has dispensed. [Tr. 174; Gov't
Exh 14]. The report indicated that controlled substances were in the
top 10 products that Jones Pharmacy sold from January 1, 2010 to August
29, 2014. [Tr. 175; Gov't Exh. 14]. The amount of profit Ms. Jones made
from schedule II narcotics during the three and a half year period was
in excess of $1.2 million. [Tr. 176].
73. Ms. Crane noted that there was an inspection conducted on April
14, 2011, where inspector Allen Miller noted that Jones Pharmacy was
filling controlled substance prescriptions for patients whose home
addresses were out of state. [Tr. 170-172; Gov't Exh. 13]. Ms. Crane
said that filling prescriptions for people traveling from out of state
was a problem indicating diversion. [Tr. 173].
74. Ms. Crane noted during her inspection that Ms. Jones had
reported a suspected forgery, and notified the police. [Tr. 186-187].
Ms. Crane advised Ms. Jones to keep her file and narrative of the
event. [Tr. 186; Gov't Exh. 12].
75. In August of 2014, Ms. Crane inspected Jones Pharmacy again and
noted that there were no remarks relating to DEA 222 forms, the
biennial inventory, filling prescriptions for out of state clients, or
that the pharmacy was dispensing mostly controlled substances. [Tr.
190-191; Resp. Exh. 8].
76. During the four inspections conducted by the Florida Department
of Health, Jones Pharmacy's dispensing and corresponding
responsibilities were discussed. [Tr. 204; Resp. Exh. 8].
D. 2013 DEA Inspection
77. The April 2013 inspection of Jones Pharmacy was prompted by Ms.
Jones' submittal of a request for a change of address. [Tr. 28].
78. When a registrant wishes to move location, the registrant is
required to request a change of address with the DEA. [Tr. 28]. When a
registrant sends a request for change of address to the Miami DEA
office, the DEA will review data from the automated consolidation
ordering system (``ARCOS'') \48\ to see if there is any issue with the
respective pharmacy's Schedule 2 and 3 narcotic ordering practices.
[Tr. 29, 118]. Looking at the ARCOS data, the DEA reviews the quantity
and type of controlled substances the pharmacy is ordering. [Tr. 120].
After the review of ARCOS data, DEA reviews the prescriptions at the
pharmacy. [Tr. 118].
---------------------------------------------------------------------------
\48\ DI Gonzales testified that the ARCOS system is a system in
which manufacturers and distributors are required to input ``their
transactions of Schedule 2 controlled substances and Schedule 1 in
small cases and at the time any Schedule 3 narcotic drugs. [The
manufacturers and distributors] are required to indicate all their
sales and purchases of controlled substances in those fields.'' [Tr.
at 30].
---------------------------------------------------------------------------
79. In April of 2013, the DEA approved the address change and Ms.
Lane assigned the pharmacy to Domingo Gonzales. [Tr. 121].
80. In the summer of 2014, Domingo Gonzales was not able to take
the lead role on the investigation due to military leave, so Ms. Lane
assigned DI Brian Curtis to fill in for DI Gonzales. [Tr. 122].
81. During the April 2013 inspection, DI Gonzales presented Ms.
Jones with a DEA 82, Notice of Inspection form. [Tr. 32]. Ms. Jones
reviewed the document and declined to ask questions. [Id.]. DI Gonzales
and Ms. Richards then asked Ms. Jones for her biennial inventories,
invoices for schedule 2 or DEA 222 forms for purchases of Schedule 2
controlled substances, and her schedule 2 controlled substance
prescriptions. [Id.].
82. DI Gonzales proceeded to review Ms. Jones' biennial
inventories, order forms, and invoices. [Tr. 32]. DI Gonzales was not
able to review all of the orders, because Ms. Jones could not produce
all of the orders. [Id.].
83. During his inspection, DI Gonzales reviewed the prescriptions
for possible red flags. [Tr. 33]. DI Gonzales noticed that on the back
of some of the prescriptions there was a copy of the purchaser's
driver's license. In some instances, the license was an out of state
license. [Tr. 33]. Also with some prescriptions, DI Gonzales noticed
that they were paid for with cash. [Tr. 33-34]. These were an
indication of red flags. [Tr. 34].
84. DI Gonzales also noted that Ms. Jones' biennial inventory was
missing some of the required information. [Tr. 35]. The inventory was
supposed to indicate amounts of finished form in each container and the
amount of commercial bottles that she had on hand during her inventory.
[Id.]. Ms. Jones' inventory only indicated the name of the controlled
substances, the strength of the controlled substances, the quantity,
and one of the NDC numbers. [Id.].
85. Specifically, Ms. Jones produced two inventories that she
conducted on November 3, 2011, and April 13, 2013,
[[Page 79207]]
respectively. [Tr. 36; Gov't Exh. 5]. In the November 3, 2011
inventory, Ms. Jones did not indicate whether the inventory was
conducted at the beginning, or close of business, as required by the
Federal Code of Regulations. [Id.]. The time the inventory is taken is
important for auditing purposes. [Tr. 37]. Ms. Jones also did not
``indicate the number of tablets per commercial container, that come in
each commercial container, or the number of commercial containers in
each that she had on hand.'' [Tr. 36; Gov't Exh. 5]. The number of
tablets is important for auditing reasons and the prevention of
diversion. [Tr. 36].
86. With regard to the April 13, 2013 inventory, the same
deficiencies as noted in the November 3, 2011 inventory were present.
[Tr. 38; Gov't Exh. 5].
87. Ms. Jones was not able to produce all of her orders for
invoices, because a great deal of the invoices were saved in coded
electronic format on her computer's desktop.\49\ [Tr. 421; 687-690].
---------------------------------------------------------------------------
\49\ DI Gonzales testified that the electronic copy of orders
for invoices appeared as a string of numbers followed by a little
bit of information, followed again by a string of numbers. This
sequence would then repeat itself. [Tr. 35].
---------------------------------------------------------------------------
88. At the conclusion of the inspection, DI Gonzales took all of
Ms. Jones' controlled substances prescriptions, her invoices for
schedule 2 controlled substances, and all of Ms. Jones' DEA 222 forms
for purchases of schedule 2 controlled substances. [Tr. 33].
89. DI Gonzales testified to orders that were indicated on DEA E222
forms. [Tr. 39]. These orders were three different orders placed on May
22, 2012, May 18, 2012, and November 15, 2011. [Tr. 39; Gov't Exh. 6].
DI Gonzales prepared the exhibit indicating the individual orders. [Tr.
39]. DI Gonzales indicated that the May 22, 2012 order, reflected on
pages 7-10, was done correctly. [Tr. 40].
90. The order placed on November 15, 2011, was done incorrectly.
There was no record of how much Ms. Jones received or the date on which
the order was received. [Tr. 42-43; Gov't Exh. 6 at 1-2]. Likewise, the
order placed on May 18, 2012, was also deficient. [Gov't Exh. 6 at 3-
6]. It did not indicate how many packages Ms. Jones received or the
date that she received the ordered packages. [Tr. 43; Gov't Exh. 6 at
3-6].
91. In total, there were 480 line items that were done incorrectly
on Ms. Jones' orders. [Tr. 44].
92. DI Gonzales testified to reviewing Jones pharmacy's dispensing
report from February 15, 2010, until July 3, 2012. [Tr. 46; Gov't Exh
2]. The report was provided in an electronic excel spreadsheet format.
[Gov't Exh. 2]. Ms. Rodriguez, attorney for Ms. Jones at the time,
provided DI Gonzales with the dispensing report, which included Jones
Pharmacy's dispensing history as far back as the day the pharmacy
opened. [Tr. 46; Gov't Exh. 3].
93. The dispensing report indicated line item numbers 1 through
3,300, and ranged from February 15, 2010 until July 3, 2012. [Tr. 47].
The report provides prescription information such as the date it was
filled, the date it was written, the drug and patient information, to
include the patient's name and date of birth, information regarding how
much the prescription cost to the pharmacy, and how much the customer
paid. [Tr. 47]. There were 834 instances where the patient paid above
$5.00 per pill. [Tr. 61; Govt. Exh. 4]. There were 415 instances where
the markup was over 1,000 percent. [Tr. 61-62].
94. When reviewing information of this nature, DI Gonzales looks
for red flags that stick out. [Tr. 49]. For example, DI Gonzales looks
for the most popular drug dispensed from the pharmacy, the information
regarding the customer, the price the pharmacy is actually charging,
and what the DEA considers ``cocktail drugs.'' \50\ [Tr. 49-50].
---------------------------------------------------------------------------
\50\ DI Gonzales defined the term ``cocktail drug'' as pain
medications such as Oxycodone or Hydromorphone combined with an
Alprazolam 2 milligram or Soma 350 milligram or Carisoprodol. [Tr.
56]. When DI Gonzales did his calculation, he only used these drugs
to calculate the total aggregate number of cocktail drugs dispensed.
[Tr. 56-57].
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95. DI Gonzales and the DEA hired Dr. Tracey Gordon to review the
dispensing records.\51\ [Tr. 50]. To enable Dr. Gordon's analysis of
the records, DI Gonzales created charts and pivot tables \52\ to
succinctly display the information. [Tr. 55; Gov't Exh 4].
---------------------------------------------------------------------------
\51\ Dr. Tracey Gordon holds a Bachelor's of Science degree in
pharmacy from Florida A&M University, and a Doctorate in pharmacy
from the University of Florida. [Tr. 216-217; Gov't Exh. 25]. Dr.
Gordon currently works as a Clinical Hospice Pharmacist. [Tr. 214].
Prior to her Hospice experience, Dr. Gordon worked in retail
pharmacy for 17 years as a pharmacist for Eckerd, Walgreens, and
Publix in certain Florida Counties. [Tr. 214-215]. Dr. Gordon was
recognized at the hearing as an expert in retail pharmacy. [Tr. 224;
see Infra FOF 106-111].
\52\ DI Gonzales explained that a pivot table is a tool
available in Microsoft Excel software that allows the user to sort
through information by topic heading and establish a chart from the
desired information. [Tr. 54-55].
---------------------------------------------------------------------------
96. Before Dr. Gordon reviewed the dispensing records, DI Gonzales
discovered through his analysis of the information that 99% of the
controlled substances Jones Pharmacy filled were for immediate release
controlled substances, and 89% of the drugs were for pain medications
that the DEA considers ``cocktail drugs.'' [Tr. 48, 50; Gov't Exh. 4].
DI Gonzales further determined that 49% of the ``cocktail drug''
controlled substances were dispensed to out of state customers. [Tr.
57].
97. DI Gonzales also determined in his analysis of the dispensing
records that 93% of the prescriptions for controlled substances were
paid for with cash. [Tr. 57]. DI Gonzales calculated the markup on the
controlled substances, and created a spreadsheet to display this
information. [Tr. 58-59; Gov't Exh. 4]. DI Gonzales determined that
there were 415 instances where Ms. Jones charged a 1,000% markup on
these controlled substances. [Tr. 61-62; Gov't Exh. 4].
98. DI Gonzales also reviewed the top 10 doctors Jones Pharmacy
dispensed for during the time frame covered in the dispensing report.
[[Tr. 62; Gov't Exh. 32]. The information revealed that Dr. Randall
Wolff prescribed 261 prescriptions that Jones Pharmacy subsequently
filled. [Tr. 63]. DI Gonzales then looked up Dr. Wolff's profile on the
Florida Department of Health License Certification website, and he
printed the profile. [Tr. 66; Gov't Exh. 42 at 2-5]. DI Gonzales then
created a packet for Doctor Wolff that consisted of a printout from
DEA's internal CSA2 database, and the report from the Florida
Department of Health License Verification website. [Tr. 66; Gov't Exh.
42]. In total, the packet was five pages. [Gov't Exh. 42].
99. DI Gonzales created documents similar to Government Exhibit 42
for all of Jones Pharmacy's top ten prescribing physicians, including
Randall Wolff. [Tr. 66-67; Gov't Exh. 33-42]. The purpose for compiling
this data was to aide Dr. Gordon's analysis of the prescriptions. [Tr.
63]
100. DI Gonzales prepared individual dispensing histories for
customers B.F. and K.F. from Ohio for the purpose of aiding Dr.
Gordon's analysis of Jones Pharmacy's prescribing practices. [Tr. 69-
70; Gov't Exh. 43].
101. DI Gonzales prepared similar documents in the same manner for
the patients listed in Government Exhibits 44-52. [Tr. 72; Gov't Exh.
44-52]. These documents are printouts of the dispensing report for the
individuals identified in the Government's Order to Show Cause. [Tr.
72; Gov't Exh. 44-52; ALJ Exh. 1]. The documents include records of all
the prescriptions the respective patients obtained from Jones Pharmacy.
[Tr. 72; Gov't Exh. 44-52].
[[Page 79208]]
102. Ms. Jones applied for a DEA license in 2013 for another
pharmacy, SND Healthcare. [Tr. 73]. DI Gonzales was alerted to SND
Healthcare's application by DEA Group Supervisor Gayle Lane. [Tr. 73].
DI Gonzales confirmed that Ms. Jones was the owner of both Jones
Pharmacy and SND Healthcare by searching the Florida Division of
Corporations' website, Sunbiz. [Tr. 74-75]. Sunbiz's records are
publicly available. [Tr. 75].
103. DI Gonzales also reviewed the Certification of Authenticity
from the Florida Department of State Division of Corporations for Jones
Pharmacy, and SND Healthcare, LLC. [Tr. 76; Gov't Exh. 9]. These
documents showed that Cherese Jones is the only corporate officer for
both corporations. [Tr. 77; Gov't Exh. 9]. These corporations also
share a mailing address. [Tr. 77].
104. DI Gonzales then searched the Florida Department of Health
database which specifies the pharmacists in charge or pharmacists
affiliated to the pharmacy. [Tr. 78; Gov't Exh. 10, at 34]. DI Gonzales
procured these documents to verify the licenses and the owners of
anyone affiliated with the pharmacy. [Tr. 79] The documents indicate
that Cherise Jones was the individual applying for the license. [Tr.
79; Gov't Exh 10, at 6].
105. In July of 2013, DI Gonzales had a meeting with Ms. Jones and
her then attorney, Ms. Monica Rodriguez. [Tr. 79-80]. The purpose of
the meeting was to discuss the red flags and issues that were found
during DI Gonzales's inspection. [Tr. 80]. At the meeting, DI Gonzales
offered Ms. Jones an opportunity to surrender her DEA number and
withdraw the application that she had pending. [Tr. 80]. Ms. Jones
declined. [Tr. 80].
E. Dr. Tracy Gordon (Government Expert)
106. Dr. Tracey Gordon is a Clinical Hospice Pharmacist, with a
little over two years of practice. [Tr. 213-214]. Dr. Gordon works on
an interdisciplinary team consisting of doctors and nurses. [Tr. 214].
The team works to help manage pain and symptoms in hospice patients.
[Id.].
107. Dr. Gordon works alongside physicians and makes
recommendations of controlled substances based on patient symptoms.
[Id.]. Prior to becoming a clinical hospice pharmacist, Dr. Gordon
worked in retail pharmacy for 17 years as a pharmacist. Before that,
Dr. Gordon was a pharmacy tech, clerk, and an intern. [Id.]. As a
retail pharmacist, Dr. Gordon worked for Eckerd, Walgreens, and Publix.
[Id.]. Dr. Gordon worked in Leon, Broward, Palm Beach, and Dade
counties, respectively. [Tr. 215]. Dr. Gordon worked as a pharmacy
manager and assistant pharmacy manager in some stores. [Id.]. For some
employers, Dr. Gordon floated from one store to the next.\53\ [Id.].
Dr. Gordon testified that she has probably worked in 200 pharmacies.
[Id.]. Dr. Gordon estimated that she worked alongside at least 100
pharmacists during her career. [Tr. 215-216].
---------------------------------------------------------------------------
\53\ Dr. Gordon explained that in retail pharmacy, you can
either have your own home store, or you can ``float'' to different
stores. [Tr. 215]. In her retail experience, Dr. Gordon did both.
[Tr. 215].
---------------------------------------------------------------------------
108. In her role as a retail pharmacist, Dr. Gordon interacted
frequently with other pharmacists in the area. [Tr. 216]. Dr. Gordon
currently holds a consultant license, and regular pharmacy license in
Florida.\54\ [Tr. 216]. Dr. Gordon obtained her Bachelors of Science
degree in pharmacy at Florida A&M University, and a Doctorate in
pharmacy from the University of Florida. [Tr. 216-217; Gov't Exh. 25].
---------------------------------------------------------------------------
\54\ At the hearing, Dr. Gordon testified that she was licensed
as a pharmacist in Florida and Georgia. [Tr. 216; Gov't Exh. 25].
Dr. Gordon's Georgia license lapsed on December 31, 2014, however.
[Tr. 290] When confronted on cross examination about this fact, Dr.
Gordon became hostile and stated that ``her Georgia license has
nothing to do with this case.'' [Tr. 291]. At one point, Dr. Gordon
interrupted a dialogue between counsel and the Judge attempting to
show how her lack of a Georgia pharmacy license was irrelevant to
this case. [Tr. 292]. As counsel for Respondents rightly pointed
out, the Government highlighted certain credentials of Dr. Gordon on
direct examination; one of those being that Dr. Gordon is licensed
as a pharmacist in Georgia. While I recognize that this case deals
with Dr. Gordon's expertise as a retail pharmacist in Florida, I
find paramount to Dr. Gordon's credibility that her credentials
accurately reflect the licenses she currently holds. If Doctor
Gordon's Georgia Pharmacy license was so idle and irrelevant that
she let it lapse, then surely it should be left off of her
curriculum vitae. Despite this fact, I find Dr. Gordon's opinions
credible to the limited extent that they deal with the practice of
retail pharmacy in Florida.
---------------------------------------------------------------------------
109. In her professional experience, Dr. Gordon has become familiar
with issues surrounding the abuse or diversion of controlled
substances. [Tr. 218]. Dr. Gordon acknowledged that there is no
comprehensive written list of issues a pharmacist may encounter during
his practice. [Tr. 218]. Dr. Gordon stated ``it's just what you do. You
just see, you have to determine whether a prescription is for a
legitimate medical purpose to protect your patient because that's what
we're here to do.'' [Tr. 218].\55\
---------------------------------------------------------------------------
\55\ In a related part of her testimony, Dr. Gordon stated
``[p]harmacists have known from the beginning of time that a
prescription should be for a legitimate medical purpose. That's our
purpose. That's one of our jobs.'' [Tr. 234]. Dr. Gordon also
testified that Florida pharmacists were aware of red flags of abuse
and diversion in 2010. [Tr. 240].
---------------------------------------------------------------------------
110. Dr. Gordon has not sat on any boards of pharmacy, a board or
organization that sets educational policy for pharmacists, and is not
currently dispensing pharmaceuticals. [Tr. 220-222].
111. Dr. Gordon was recognized as an expert in retail pharmacy.\56\
[Tr. 224].
---------------------------------------------------------------------------
\56\ During her cross examination, Dr. Gordon was asked about
Florida pharmacists' general knowledge of red flags. [Tr. 323]. Dr.
Gordon stated that she knew of Florida pharmacists' general
knowledge of red flags because she spoke to pharmacists in her
network, and watched a reality show broadcast on national television
that depicted diversion in Broward and Dade Counties. [Id.]. When
asked about the identities of the independent pharmacists Dr. Gordon
spoke to in 2010, Dr. Gordon became hostile stating ``Well let's
see, do you remember everyone you speak to back in 2010? I do
remember there's this one pharmacist who used to come into Publix
all the time and we talked about it all the time'' and ``[h]ow about
my father? . . . My father is an independent. He worked for
independent for years.'' [Tr. 324]. Notwithstanding the above listed
statements, Dr. Gordon's experience infers that she had a great deal
of interaction with Florida Pharmacists during her career, including
the years 2010 through 2012. And despite her inability to articulate
specific examples, it follows that Dr. Gordon was generally aware of
Florida pharmacists' knowledge of red flags because she had
extensive interaction with many pharmacists during the applicable
time period. For this reason, I find Dr. Gordon's testimony
regarding what Florida pharmacists knew from 2010-2012 credible and
persuasive.
---------------------------------------------------------------------------
112. Dr. Gordon testified that in order to ensure that a
prescription was issued for a legitimate medical purpose, a pharmacist
must check the dose, check the quantity, see what type of doctor wrote
the prescription, and look at the patient's address. [Tr. 226]. Dr.
Gordon stated that in order to properly check the prescription, the
pharmacist must be a ``judge of the person too, to see the person, to
make sure that's what they need.'' \57\ [Id.].
---------------------------------------------------------------------------
\57\ Dr. Gordon testified that it was possible some of Jones'
patients were drug dealers or drug addicts. [Tr. 340]. When asked
about her experience with drug addicts or drug users, Dr. Gordon
stated ``[a]ctually I was in a group with a bunch of drug addicts in
my church. Yes, I was with them for two years and I helped them.''
[Tr. 342]. Dr. Gordon admitted that she did not have any formal
social work degrees or drug counseling training. [Id.]. In this
vein, I afford Dr. Gordon's testimony no weight as it relates to
whether or not Jones' patients were drug dealers or addicts because
Dr. Gordon has no personal knowledge of Jones' patients. Dr.
Gordon's testimony is only credible in that it shows the
prescriptions Jones Pharmacy filled presented red flags for a
variety of reasons. [Tr. 342].
---------------------------------------------------------------------------
113. Another concern to Dr. Gordon is when patients ask you not to
bill their insurance company and to pay cash for the prescription
instead. [Id.]. That to Dr. Gordon is one of the biggest signs of
possible abuse or diversion. [Id.].
114. Dr. Gordon explained the tools that are available to the
pharmacist in preventing diversion. [Tr. 227]. One such tool is E-
FORCSE. [Id.]. E-FORCSE is a program that was created
[[Page 79209]]
by the state of Florida so that a pharmacist could see if a patient was
either doctor shopping or pharmacy shopping. [Id.]. The program shows
other pharmacies where the patient went to fill prescriptions, and the
medication and controlled substances he received. [Tr. 228]. Dr.
Gordon's normal procedure when she receives a prescription is to check
if the patient has visited her pharmacy before. If the patient has not,
then Dr. Gordon will look for the patient's profile in the E-FORCSE
program. [Tr. 227-228].
115. Dr. Gordon also stated that it was important to know the scope
of a physician's practice, because deviation from the practice area
could indicate a possible red flag.\58\ [Tr. 228-229]. Dr. Gordon
stated that if a pharmacist does not know the prescriber, there are
other tools the pharmacist can use to view a prescriber's specialty.
[Tr. 228]. Dr. Gordon explained that Publix had a National Provider
Identifier (``NPI'') system which allowed the pharmacist to look up a
doctor and their specialty. [Id.]. For pharmacies without an NPI, Dr.
Gordon stated that a pharmacist could also go to the Department of
Health website and look up the prescriber's specialty as well. [Tr.
228].
---------------------------------------------------------------------------
\58\ During her cross-examination Dr. Gordon stated that it is
``frowned upon'' and ``unethical'' for a doctor to write a
prescription for a reason outside of his particular scope of
practice. [Tr. 334-335]. When questioned along these lines, Dr.
Gordon could not produce a rule or authority for these contentions.
[Id.]. Here, I afford no weight to Dr. Gordon's conclusions that it
is ``unethical'' or ``frowned upon'' for a physician to write a
prescription outside his normal scope of practice, for Dr. Gordon
presented no authority, rule, or basis for her knowledge that would
corroborate these assertions. I do, however, recognize and find
credible Dr. Gordon's testimony that a physician prescribing outside
their normal scope of practice presents a ``red flag'' when there is
a high volume of controlled substances prescribed by a doctor
repeatedly operating outside his scope of practice. [Tr. 228-229;
379]. In this instance, Dr. Gordon noted such a pattern by utilizing
and sorting through DI Gonzales' Microsoft excel pivot tables. [Tr.
379-380].
---------------------------------------------------------------------------
116. Dr. Gordon explained that with proper pain management, ``the
patient should present a prescription for a long acting plus a short
acting [medication]. And the rule of thumb is, you know, usually no
more than two to three breakthrough doses per day. So really a short
acting prescription if the patient is being managed chronically should
not exceed maybe three tablets a day or 90 pills a month.'' [Tr. 229].
117. Dr. Gordon further testified that some drugs, like Oxycodone
and Hydromorphone can be a red flag themselves. [Tr. 230]. Dr. Gordon
testified to an IMS Institute of Healthcare Informatics report that was
admitted at the hearing. [Tr. 287-288; Gov't Exh. 29]. Dr. Gordon
stated that the IMS report indicates that the national average for cash
sales of prescriptions dispensed between the years 2007 to 2011 is six
percent. [Tr. 288; Gov't Exh at 42].
118. Dr. Gordon testified that there are circumstances where a
pharmacist can fill prescriptions despite the presence of one or more
of these red flags. [Tr. 231]. This can be accomplished by speaking to
the patient, speaking to the caregiver, speaking to the physician's
office. [Tr. 231].
119. Dr. Gordon stated that as a retail pharmacist, she never set
prices for any medications. [Tr. 297].
120. In 2010, Dr. Gordon was asked by Group Supervisor Gayle Lane
and DI Domingo Gonzales to look at Jones Pharmacy's prescriptions to
determine if Cherise Jones did anything wrong in filling them. [Tr.
240]. Dr. Gordon was asked to look at Jones Pharmacy's prescriptions
and dispensing report, and determine whether or not she would have
filled the prescriptions at issue. [Tr. 240-241, 301]. Dr. Gordon
prepared a report that described certain red flags that she saw with
Jones Pharmacy's prescriptions. [Tr. 305]. Dr. Gordon testified that
some of the prescriptions presented red flags that could not be
conclusively resolved. [Tr. 241].
F. Red Flags Within Jones Pharmacy's Prescriptions
121. There is no one place where a registrant can go to view a
published list of ``red flags.'' [Tr. 140]. This includes the DEA
Pharmacy Manual, or the DEA's instructions on operating a pharmacy.
[Tr. 140-141]. Supervisor Lane testified that there is no place where
pharmacists can find a comprehensive list of ``red flags'' because the
red flags are changing in various parts of the country. [Tr. 142].
Supervisor Lane said that recognizing these flags was ``common sense on
a pharmacist's part,'' and that DEA cannot publish a definitive list of
red flags because ``[p]harmacy practice isn't a checkoff list, and the
red flags change.'' [Tr. 142-143].
122. Jones Pharmacy filled prescriptions for patients B.F. and K.W.
These two individuals presented identification from Ohio on the same
street. [Tr. 243; Gov't Exh. 15, 43].\59\ The patients were seeing the
same doctor in Fort Lauderdale, the prescriptions were written on the
same date, and the prescriptions were filled at the same time for
common cocktail medications: Oxycodone 30, Oxycodone 15, Xanax 2, and
Carisoprodol. Dr. Gordon stated that the dosing in these prescriptions
were red flags because with proper pain management, a person normally
has a long acting medication plus a short acting pain medication. [Tr.
244; Gov't Exh. 15, 43] In this case, both Oxycodone 30 and Oxycodone
15 were dispensed. [Tr. 244]. There is no need, however, to issue these
two different strengths of this prescription because Oxycodone 30 could
be split in half to achieve the proper dose. [Tr. 244-245; Gov't Exh.
15, 43]. Further, Dr. Gordon testified that a combination of Oxycodone
and Xanax was a red flag because the two medications accentuate each
other making euphoric effects. Dr. Gordon testified that there was
nothing Jones Pharmacy could have done to resolve all of these red
flags when presented together.\60\ [Tr. 243; Gov't Exh. 15, 43].
---------------------------------------------------------------------------
\59\ Government Exhibits 43 through 54 are printouts of the
dispensing report that indicate the dispensing history for the
customers whose prescriptions are identified in the order to show
cause. [Tr. 72]. When counsel for the Government introduced a set of
prescriptions in Government Exhibits 15 through 24, he also
introduced the correlating customer's dispensing history in
Government Exhibits 43-54. [Tr. 72] The exhibits were prepared this
way to avoid the use of an electronic spreadsheet. [Tr.70].
\60\ In Government Exhibit 15 at 1, there was a handwritten
notation stating that the prescription was verified by Angie. [Tr.
243-244]. Dr. Gordon testified that this only indicated that someone
at Jones pharmacy called to make sure the doctor wrote the
prescription, not that Jones Pharmacy tested whether this
prescription was for a legitimate medical purpose. [Tr. 244].
---------------------------------------------------------------------------
123. Jones Pharmacy filled prescriptions for patients that traveled
from North Carolina to see doctors in Deerfield Beach. [Tr. 247-248;
Gov't Exh. 16, 44]. Dr. Wolff, a pulmonologist, and Dr. Nuanger, a
urologist, issued multiple prescriptions for Oxycodone 15 mg, 30 mg,
and Xanax 2 mg. [Tr. 248 Gov't Exh. 16, 44]. Each time, Jones Pharmacy
was paid cash for these prescriptions. [Tr. 248]. Dr. Gordon testified
that it was not normal to see prescriptions from a urologist for
combinations of Oxycodone and Xanax month after month. [Tr. 249; Gov't
Exh. 16, 44]. Likewise, Dr. Gordon testified that it was not typical to
see a pulmonologist issue prescriptions for Oxycodone and Xanax,
especially since these patients were receiving these prescriptions
repeatedly, month after month. [Tr. 249; Gov't Exh. 16, 44]. Dr. Gordon
testified that there was nothing Jones Pharmacy could have done to
resolve the red flags present in these prescriptions. [Tr. 248; Gov't
Exh. 16, 44].
124. Jones Pharmacy filled prescriptions for D.H. and K.S. [Tr.
250; Gov't Exh. 17, 45]. These patients
[[Page 79210]]
presented identification which indicated they lived at the same address
in Tennessee. [Tr. 250; Gov't Exh. 17, 45]. Jones dispensed common
cocktail drugs, Oxycodone 30 mg, Oxycodone 15 mg, and Xanax 2 mg to
D.H. and K.S. [Tr. 250; Gov't Exh. 17, 45]. Both patients were seeing
doctors in Opa Locka, Florida. [Tr. 250; Gov't Exh. 17, 45]. The
patients paid for these prescriptions with cash. [Tr. 250]. Dr. Gordon
testified that there was nothing Jones Pharmacy could have done to
resolve the red flags present in these prescriptions. [Tr. 250; Gov't
Exh. 17, 45].
125. Ms. Jones testified to prescriptions for patient D.H. and
patient K.S. which indicated the patients' diagnosis. [Tr. 515-517;
Gov't Exh. 17, at 1, 9]. Both prescriptions listed ``chronic back
pain'' on their front side in handwriting. [Gov't Exh. 17, at 1, 9].
The back of these prescriptions indicated that the patients had the
same address. [Gov't Exh. 17, at 2, 10]. With regard to the similar
addresses, Ms. Jones admitted that at the time these prescriptions were
filled it was ``not something that [she] actually probably noticed.''
[Tr. 518]. Ms. Jones stated that looking at the addresses is something
now that she looks at more closely. [Tr. 518-519]. Ms. Jones testified
that she is not aware of this or any prescription dispensed at the
pharmacy being diverted. [Tr. 517].
126. Jones Pharmacy filled prescriptions for patients on two dates
in April of 2010 where red flags were present. [Tr. 251; Gov't Exh.
18,46]. All of the prescriptions filled on April 19, 2010 and April 20,
2010, were from patrons who lived out of state. [Tr. 251; Gov't Exh.
18,46]. Specifically, the patrons lived in Ohio, West Virginia,
Georgia, Tennessee, Kentucky, and Mississippi. They were prescribed the
typical cocktail medications Oxycodone 15, Oxycodone 30, and Xanax 2.
[Tr. 251; Gov't Exh. 18, 46]. There was also some Percocet sporadically
prescribed therein. [Tr. 251- 252; Gov't Exh. 18,46]. All of the
patients were driving to either Miami or Deerfield Beach and seeing a
couple of doctors, including Dr. Wolff, the pulmonologist. [Tr. 252;
Gov't Exh. 18,46]. Dr. Gordon testified that there was nothing Jones
Pharmacy could have done to resolve the red flags present in these
prescriptions. [Tr. 251-252; Gov't Exh. 18, 46].
127. Jones Pharmacy filled prescriptions where red flags were
present on October 26, 2010. [Tr. 252-253; Gov't Exh. 19, 47]. The
patient these prescriptions were dispensed to lived in Panama City,
approximately 10 hours away from Jones Pharmacy. [Tr. 253; Gov't Exh.
19, 47]. The medications were prescribed to a 56-year-old man, by a
pediatrician, and consisted of Oxycodone 30 mg, Oxycodone-APAP 10/325
mg, and Carisoprodol 350 mg. [Tr. 253; ALJ Exh. 21 at 4]. Dr. Gordon
testified that there was nothing Jones Pharmacy could have done to
resolve these flags. [Tr. 257-258; Gov't Exh. 19, 47].
128. Jones Pharmacy filled prescriptions for patient D.T. on
February 28, 2011. [Tr. 265; Gov't Exh. 20, 48]. The prescriptions were
for Oxycodone 30 mg, Oxycodone 15 mg, and Alprazolam 2 mg. [Tr. 266].
The prescription indicated that the patient is from West Virginia. [Tr.
265-266; Gov't Exh. 20, 48]. The prescribing doctor, Dr. Karten, is a
Gynecologist, or OB/GYN. [Tr. 268; Gov't Exh. 20, 40, 48]. Patient
D.T., however, is a male. [Tr. 268]. This indicates that Dr. Karten is
prescribing outside the scope of his practice. [Tr. 268]. Dr. Gordon
testified that there was nothing Jones Pharmacy could have done to
resolve the red flags present in these prescriptions. [Tr. 268; Gov't
Exh. 20, 48].
129. Jones Pharmacy filled prescriptions for three different
individuals on July 27, 2011. [Tr. 269; Gov't Exh. 21, 49]. The
prescriptions were filled for three different patients from West Palm
Beach who traveled to Wilton Manors, Florida, to obtain similar
prescriptions. [Tr. 269; Gov't Exh. 21, 49]. The prescriptions were
prescribed on the same date for Oxycodone 30, Xanax 2, and Oxycodone
15. [Tr. 269; Gov't Exh. 21, 49]. The patients all paid for the
prescriptions in cash. [Tr. 269; Gov't Exh. 21, 49]. Dr. Gordon
testified that there was nothing Jones Pharmacy could have done to
resolve the red flags present in these prescriptions. [Tr. 270; Gov't
Exh. 21, 49].
130. Jones Pharmacy filled prescriptions for three patients on
August 1, 2011. [Tr. 270; Gov't Exh. 22, 50]. These prescriptions were
filled for patients from West Palm Beach, Florida, who drove to
Sunrise, Florida, to obtain these prescriptions for cocktail
medications. [Tr. 270; Gov't Exh. 22, 50]. After obtaining identical
prescriptions on the same day from the same doctor, these patients
drove to Jones Pharmacy to have them filled. [Tr. 270; Gov't Exh. 22,
50]. The patients presented prescriptions for Oxycodone 30 mg and Xanax
2 mg. [Tr. 271; Gov't Exh. 22, 50]. Dr. Gordon stated that this
appeared to be an instance where the doctor was ``rubber stamping'' the
prescriptions, there was no individualized treatment. [Tr. 271; Gov't
Exh. 22, 50]. Dr. Gordon further testified that Xanax 2 mg is a very
high dose of Xanax.\61\ Dr. Gordon testified that there was nothing
Jones Pharmacy could have done to resolve the red flags present in
these prescriptions. [Tr. 272; Gov't Exh. 22, 50].
---------------------------------------------------------------------------
\61\ Dr. Gordon testified that in her experience as a Clinical
Hospice Pharmacist catering to terminal patients, she rarely sees
prescriptions for Xanax 2 mg because it is such a high dose of
Xanax. [Tr. 272].
---------------------------------------------------------------------------
131. Ms. Jones testified that at the time the above described
prescriptions were presented, she had no concerns with the
prescriptions, including the distances the patients traveled to the
pharmacy. [Tr. 528-529]. In fact, Ms. Jones testified that these
prescriptions indicated that she and a pharmacy technician wrote on the
prescriptions verifying the diagnosis. [Tr. 526-527]. Ms. Jones stated
that with her current knowledge, if she was presented with the same
prescription today, she would look at the patient's address, look at
the type of doctor, the monitoring system E-FORCSE, and have the
patient explain the reason for filling the prescription at Jones
Pharmacy if he traveled a long distance. [Tr. 529-530].
132. Jones Pharmacy filled prescriptions for repeat customer D.O.
on multiple occasions. [Tr. 273; Gov't Exh. 23, 51]. D.O. presented
identification that indicated his address is in Pompano Beach, Florida.
[Tr. 273; Gov't Exh. 23, 51]. D.O. drove to Miami to see a doctor, and
then back up to Fort Lauderdale to Jones Pharmacy to have the
prescription filled. [Tr. 273; Gov't Exh. 23, 51]. D.O. obtained
Hydromorphone 8 mg and Clonazepam 1 mg. [Tr. 273; Gov't Exh. 23, 51].
Hydromorphone 8 mg and Clonazepam 1 mg are common cocktail medications.
[Tr. 273]. The doctor who provided D.O. these medications, Ronald H.
Thompson, M.D., specializes as an obstetrics and gynecologist, an OB/
GYN. [Tr. 274; Gov't Exh. 38]. D.O. is a male patient. [Tr. at 274].
During his first visit to Jones Pharmacy, D.O. paid $900 for 180
tablets of Hydromorphone. [Tr. 274]. On his second visit, he paid $1620
for 180 tablets of Hydromorphone 8 mg. [Tr. 275]. Dr. Gordon stated
that these factors indicated Jones Pharmacy knew that ``these
medications were diverted and [that] the patron was taken advantage
of'' by Jones Pharmacy by charging such high prices. [Id.]. Dr. Gordon
testified that there was nothing Jones Pharmacy could have done to
resolve the red flags present in these prescriptions, and these
prescriptions could not have been filled in compliance with Jones
Pharmacy's duties. [Tr. 275; Gov't Exh. 23, 51].
[[Page 79211]]
133. Jones Pharmacy filled prescriptions for patient M.S./S.M. who
lives in Deerfield Beach, Florida. M.S./S.M. traveled north to Boca
Raton, Florida, to see a doctor, then traveled south to Jones Pharmacy
to have the prescriptions filled. [Tr. 276; Gov't Exh. 24, 52]. The
prescriptions filled were Oxycodone 30 mg, and the doctor's signature
appeared to be stamped, not signed. [Tr. 276; Gov't Exh. 24]. Dr.
Gordon testified that this indicates that Oxycodone 30 mg is a
medication that this Doctor regularly prescribes. [Tr. 277]. M.S./S.M.
paid between $1080--$1980 for a 180 pill prescription. [Tr. 277]. Dr.
Gordon stated that this indicated that ``the pharmacist was aware of
what she was charging and [that she was] taking advantage of patrons,
of drug addicts or drug dealers.'' [Tr. 277]. Dr. Gordon further stated
that there was nothing Jones Pharmacy could have done to resolve the
apparent red flags in these prescriptions. [Tr. 279].
134. Ms. Jones testified about the verifications that were
conducted for these prescriptions. [Tr. 533; Gov't Exh. 24]. Ms. Jones
confirmed that the prescriptions were verified with the prescriber for
the diagnosis. [Tr. 534]. Ms. Jones confirmed that the prescriptions
appear to have been stamped with the prescribing Doctor's signature.
[Tr. 534-536].
135. With regard to the above listed prescriptions at issue in this
matter, Ms. Jones testified that ``we may have made mistakes that
people may call dumb, naive, stupid, but it was not our intent to put
stuff in the hand of other people.'' [Tr. 531]. Ms. Jones further
stated ``I would have done stuff different if it was, if it's now, I
would do it different.'' [Tr. 532]. Ms. Jones also expressed confusion
about her corresponding responsibility when questioned on the topic.
She stated ``I did not know that the law said that I had to make sure
that prescriptions said it was legitimate, medically legitimate.'' [Tr.
640]. When asked if there were circumstances that would cause Ms. Jones
to reject a prescription, Ms. Jones stated ``[t]here are circumstances
that would cause me to reject a prescription. I don't think I can make
the determination whether it's for a legitimate medical purposes
because I would have to say that I'm in that person's body and I know
how they feel if we're speaking just about pain medications.'' [Tr.
625].
136. Ms. Jones admitted that ``she could have done things a lot
different.'' [Tr. 579]. Ms. Jones stated that she was aware of her
responsibility for public safety, but that she didn't think at the time
that the prescriptions were issued for a non-legitimate medical
purpose. Ms. Jones stated that she thought what she did was enough in
reconciling the prescriptions. [Tr. 579] Now, however, Ms. Jones knows
that she could have, and should have, done more.\62\ [Tr. 580].
---------------------------------------------------------------------------
\62\ On cross examination, Ms. Jones repeatedly stated that
there was more she could have done to ensure the legitimacy of the
prescriptions at issue. [Tr. 579-580, 582-583, 585-586, 588, 590-
591, 593-596, 599-601, 608-609, 620-621, 623-624]. Ms. Jones
admitted that her ``process wasn't great for looking at if [a
prescription] was issued for [a] legitimate medical purpose.'' [Tr.
580]. The process Ms. Jones used in 2010 only involved her calling
the prescribing doctor's office for verification that the doctor
wrote the prescription. [Tr. 581].
---------------------------------------------------------------------------
137. In 2010, Jones Pharmacy made a total gross margin of
$530,483.06 on the sales of controlled substances. [Tr. 651; Resp. Exh.
13, at 40]. In 2010, Jones pharmacy made a total gross margin of
$10,188.89 on the sales of non-controlled substances. [Tr. 652; Resp.
Exh. 14, at 25]. Ms. Jones testified that in 2010, controlled substance
sales made up the primary sources of her income. [Tr. 653]. Ms. Jones
stated that this amount of controlled substance sales for an
independent pharmacy was normal in 2010. [Tr. 653]. In 2010, Ms. Jones
conversed with a Walmart pharmacist in Jacksonville, an independent
pharmacist in Fort Lauderdale, and an independent pharmacist in Miami
on this topic. [Tr. 655-656]. These pharmacists told Ms. Jones that
this level of controlled substance sales was normal. [Tr. 654-655].
138. In 2011, Jones Pharmacy filled slightly less than 1,100
prescriptions for controlled substances. [Tr. 666]. Jones Pharmacy made
a total gross margin of $439,990 on the sales of these controlled
substances. [Tr. 666-667; Resp. Exh. 15, at 25]. In 2011, Jones
Pharmacy made a total gross margin of $38,241 on the sales of non-
controlled substances. [Tr. 667; Resp. Exh. 16, at 66].
139. In 2012, Jones Pharmacy filled 720 controlled substance
prescriptions for a profit of $316,942. [Tr. 669-670; Resp. Exh. 17, at
19]. In 2012, Jones Pharmacy made a total gross margin of $58,123 on
the sales of non-controlled substances. [Resp. Exh. 18, at 64].
140. From April 2013 to December 2013, Jones pharmacy dispensed 213
prescriptions for controlled substances for a profit of $25,556.69.
[Tr. 670-671; Resp. Exh 19, at 8].
141. In 2010, Jones pharmacy did not have any written policies
related to the filling of prescriptions for controlled substances as it
had to do with the legitimacy of prescriptions. [Tr. 656].
142. In 2011 and 2012, Jones Pharmacy filled more prescriptions for
non-controlled substances than controlled substances. [Tr. 708; Resp.
Exh. 4, 15, 16,17, 18].
143. In 2013, Jones Pharmacy filled more prescriptions in non-
controlled substances than controlled substances. [Tr. 709; Resp. Exh.
4, 19, 20].
G. Ms. Cherese Jones
144. Ms. Jones is the sole owner of Jones Pharmacy and SND
Healthcare. [Tr. 570; Gov't Exh 9, 10]. Jones Pharmacy has always been
under the management of Ms. Jones. [Tr. 571]. Ms. Jones is the
Registered Agent, the Florida Community Pharmacy Permit applicant,
managing member, and authorized representative who submitted the
Applications By Foreign Limited Liability Company For Authorization To
Transact Business in Florida for both Jones Pharmacy and SND
Healthcare. [Gov't Exh. 9, 10].
145. Ms. Jones works at Jones Total Health Pharmacy. [Tr. 385].
Jones Pharmacy is a community pharmacy in Fort Lauderdale. [Id.]. Ms.
Jones holds current pharmacist licenses in Florida, Pennsylvania,
Nebraska, Arkansas, Tennessee and Kentucky. [Tr. 385-386; Resp. Exh 1].
Jones Pharmacy has a current license with the Florida Department of
Health, Division of Medical Quality Assurance. [Tr. 387; Resp. Exh. 2-
3].
146. Ms. Jones sent a letter to her congresswoman and two senators
in Florida based on the delay she was experiencing with the DEA
approving her move from one location to the other. [Tr. 87]. DI
Gonzales was aware of Ms. Jones' congressional inquiries at the time he
conducted the pharmacy inspection. [Tr. 87]. In the letters to her
congressional representatives urging action on behalf of the DEA to
change her pharmacy's address, Ms. Jones stated that she was `` `lucky'
to move her business to a `better environment' where she could `go in
the parking lot and not worry about smelling urine or seeing people
hanging out on the sidewalk.' '' [Resp. Exh. 5 at 2, 6 at 2, 7 at 2].
147. Ms. Jones graduated from Florida A&M University with a doctor
of pharmacy degree in 2000. [Tr. 392; Resp. Exh. 1].
148. After graduation, Ms. Jones completed two American Society of
Health Systems (ASHP) Pharmacists residencies. [Tr. 392-393]. The ASHP
residencies are post-graduate volunteer training that a candidate is
matched for. [Tr. 392]. Ms. Jones did her ASHP residency at Jackson
Memorial Hospital, Miami, Florida. [Tr. 393-394; Resp. Exh 1].
149. Ms. Jones' first residency was in pharmacy practice, and it
focused mainly on adults. [Tr. 394]. The second
[[Page 79212]]
residency Ms. Jones completed was for pediatrics. [Tr. 395]. Following
her residency at Jackson, Ms. Jones moved to Pennsylvania where she
worked at a children's hospital and did some part-time rotations at a
Walgreens. [Tr. 396].
150. After ten months in Pennsylvania, Ms. Jones moved back to
Florida and began working at Miami Children's Hospital. [Tr. 400]. Ms.
Jones worked at Miami Children's hospital for two years. [Tr. 407].
Following Miami Children's Hospital, Ms. Jones worked as a pharmacist
for various employers, including Target, until she was hired by
Community Health of South Florida (``CHI''). [Tr. 408]. CHI is a
federally qualified health center. [Id.]. At CHI, Ms. Jones supervised
three pharmacy managers, and numerous staff pharmacists and
technicians. [Tr. 408-409].
151. Ms. Jones has completed poster presentations, and presented
her work at the mid-year ASHP meetings. [Tr. 412]. Ms. Jones has also
conducted in-service lectures. [Tr. 412-413; Resp. Exh. 1].
152. Ms. Jones started Jones Total Health Pharmacy in February of
2010. [Tr. 410]. Ms. Jones has always had a strong interest in
pediatrics, and she desired to bring that interest to her own pharmacy.
[Tr. 411]. Ms. Jones had never operated a pharmacy on her own before
starting Jones Total Health Pharmacy. [Tr. 414]. Jones Pharmacy's
original location was on 300 West Sunrise Boulevard in Fort Lauderdale.
[Id.].
153. When Jones Pharmacy opened in 2010, it opened using a
wholesaler, H.D. Smith. [Tr. 416]. H.D. Smith provided the pharmacy
with everything that Jones Pharmacy sold, including controlled
substances. [Tr. 416]. After about three months with H.D. Smith, the
company informed Jones Pharmacy that its purchase volume was not enough
to keep it with H.D. Smith. [Tr. 417]. Jones Pharmacy was then referred
to SmartSource, but SmartSource only sold non-controlled substances.
[Id.]. At that point, Jones Pharmacy started using multiple companies
to get everything that it needed for the pharmacy. [Tr. 417-418]. Jones
Pharmacy has been using McKesson for its pharmaceutical needs since the
end of 2011. [Tr. 417-418].
154. Ms. Jones initiated policies and procedures she had utilized
at CHI when she started Jones Pharmacy. [Tr. 420]. These policies
included recording a patient's information in the computer system,
checking whether a patient had allergies, and recording patient
demographics. [Tr. 419]. Then the prescription was scanned into the
computer and typed. [Tr. 419]. If a patient presented a prescription
for a controlled substance, Ms. Jones would call the doctor's office to
ensure the doctor authored and issued the prescription. [Tr. 420] At
its inception, Ms. Jones ensured that most of the pharmacy's policies
and procedures were in writing. [Tr. 421]. Ms. Jones stated that the
policies and procedures change when changes are necessary. [Id.].
Later, Ms. Jones started asking the prescribing doctor for a patient's
diagnosis. [Tr. 513]. This was not until after the pharmacy had
operated for a while, because it was not something that Ms. Jones had
done at the other pharmacies she had previously worked at. [Id.].
155. Ms. Jones was not present for the State of Florida Department
of Health Investigative Services inspection on April 14, 2011. [Tr.
423; Gov't Exh. 13]. In the remarks section of the report, Investigator
Alan Miller concluded that Jones pharmacy was ``filling and dispensing
what appears to be a large amount of Schedule II Controlled Substances
written prescriptions'' from out of state patients. [Tr. 425-426; Gov't
Exh. 13].
156. Jones Pharmacy stopped filling out of state prescriptions on
April 1, 2011. [Tr. 426]. At that time, Jones Pharmacy's policies and
procedures were not modified in writing to reflect this new policy
change. [Tr. 428].
157. Jones Pharmacy had a fraud policy in place, for the
identification and process of fraudulent prescriptions, in October of
2011. [Tr. 430; Resp. Exh. 25].
158. Pursuant to deficiencies uncovered during inspections from the
State of Florida Department of Health Investigative Service, Ms. Jones
promptly corrected all noted deficiencies. [Tr. 431-436].
159. The State of Florida Department of Health Investigative
Service conducted an inspection on October 12, 2011, at Jones Pharmacy.
During this inspection, Ms. Jones was not told that any of Jones
Pharmacy's DEA 222 forms were deficient. [Tr. 441; Resp. Exh. 8, at 7].
160. The State of Florida Department of Health Investigative
Service conducted an inspection on June 7, 2012, at Jones Pharmacy, for
a change of pharmacy location. [Tr. 440; Resp. Exh. 8, at 5-6]. During
this inspection, the Florida Department of Health investigator did not
tell Ms. Jones that any of Jones Pharmacy's DEA 222 forms were
deficient. [Tr. 440-441; Resp. Exh. 8 at 5-6]. Also during the June 7,
2012 inspection, Ms. Jones notified the inspector that the pharmacy had
encountered a prescription that had been forged. [Tr. 442; Resp. Exh.
8, at 5]. In response, the pharmacy reported the forgery to the police.
[Id.].
161. After the State of Florida Department of Health Investigation
inspected the new location for a change of pharmacy location, Ms. Jones
submitted a request of registration update to the DEA. [Tr. 446]. Ms.
Jones called the DEA and was told how to request the change of
location. [Id.]. Ms. Jones completed her request on June 20, 2012.
[Id.].
162. Ms. Jones acquired the new location, 1150 West Sunrise
Boulevard, Fort Lauderdale, FL, in March of 2012. [Tr. 446; Resp. Exh.
12]. At that time, Ms. Jones was paying rent for two pharmacy
locations: the new location awaiting approval from the DEA, and the
location where she was operating. [Tr. 446-447].
163. Ms. Jones submitted her application for address change online
to the DEA on June 20, 2012. [Tr. 455]. She followed-up on her
application on July 3, 2012, by calling the DEA call center. [Tr. 455]
The call center transferred Ms. Jones to the DEA's Weston office, and
Donna Richards responded to Ms. Jones inquiry. [Tr. 455]. Later that
day, Susan Langston called Ms. Jones and asked for a dispensing report
for controlled substances. [Tr. 455-456; Gov't Exh. 2]. After Ms. Jones
submitted the requested information to Ms. Langston, she waited for a
reply. [Tr. 457]. Jones Pharmacy was prohibited from moving its
controlled substances to the new location until the DEA approved the
registration at the new address. [Id.].
164. Because Ms. Jones did not hear anything from Ms. Langston
after she submitted her dispensing report, Ms. Jones sent emails to the
DEA asking if there was any update on her registration. [Tr. 457].
Then, in October of 2012, Ms. Donna Richards asked Ms. Jones to send
her Jones Pharmacy's dispensing report. [Tr. 457]. Ms. Jones sent Ms.
Richards the file that same day, and Ms. Richards confirmed receipt.
[Tr. 458]. Thereafter, Ms. Jones emailed for updates but did not
receive any. [Id.].
165. Due to the DEA's inaction on her registration request, on
March 7, 2013, Ms. Jones wrote to her U.S. Congresswoman, and U.S.
Senators explaining the delay and her frustration. [Tr. 460; Resp. Exh.
No 5, 6,7]. Senator Nelson, Senator Rubio, and Congresswoman Wasserman
Shultz wrote back to Ms. Jones. [Tr. 464-465; Resp. Exh. 5,6,7].
166. Then, on April 2, 2013, Ms. Jones had a site visit from DI
Gonzales and DI Richards. [Tr. 467-468]. During the visit, Ms. Jones
was asked for controlled
[[Page 79213]]
substance prescriptions and ordering records. [Tr. 469]. Ms. Jones
produced a computer file with the controlled substance ordering system
(``CSOS'') \63\ records. [Id.]. The file was saved in a CSV format.
[Tr. 470]. Ms. Jones sent a paper copy of the records to DI Gonzales on
May 3, 2013, via FedEx. [Tr. 471]. DI Gonzales contended that he could
not the read the records, so Ms. Jones wrote a key on the first page of
the packet to help DI Gonzales understand the CSV format for the
finalized CSOS orders. [Tr. 471, 473-474; Gov't Exh. 53].
---------------------------------------------------------------------------
\63\ The Controlled Substance Ordering System (``CSOS'') is the
system pharmacies use to electronically order a controlled substance
from their wholesalers. [Tr. 470].
---------------------------------------------------------------------------
167. Ms. Jones testified that during the April 2, 2012 inspection,
the meeting ``wasn't a good overall tone. The meeting just, it didn't
really--it deteriorated after it started.'' [Tr. 475]. Ms. Jones stated
that DI Gonzales took with him Jones Pharmacy's controlled substances
prescriptions, schedules II-V. [Tr. 475]. He also took the controlled
substance ordering receipts and records. [Tr. 475].
168. Later on April 2, 2012, Ms. Jones received a call from DI
Gonzales, DI Langston, and DI Richards. [Tr. 476]. Ms. Langston talked
with Ms. Jones about the inspection that had been conducted that day
and the letters Ms. Jones wrote to her Senators and Congresswoman. [Tr.
477]. Ms. Langston said the Registration was done, and DI Richards
confirmed it. [Id.]. The change of address was approved. [Tr. 477;
Resp. Exh. 8].
169. The next time Jones Pharmacy was inspected was in June of 2013
by the Florida Department of Health [Tr. 478].
170. In July of 2013, Ms. Jones met with DI Gonzales. [Tr. 481]. At
the meeting, DI Gonzales talked about pricing, specialties of
prescribers, and drug cocktails. [Tr. 481].
171. Ms. Jones explained that Jones Pharmacy's controlled
substances are priced through Average Wholesale Pricing (``AWP''). [Tr.
481-482]. Jones pharmacy has formulas in its software system that are
based off of AWP. [Id.]. Specifically, Jones Pharmacy uses a Rx30
pharmacy system that derives its pricing information from First
Databank. [Tr. 482, 678]. First Databank is a service Rx30 uses to set
AWP information. [Tr. 678-679]. First Databank publishes various
pricing benchmarks and information, and the Rx30 software is driven
from it. [Tr. 678]. Jones Pharmacy has always used First Databank
pricing, but it was up to the Pharmacy to change the pricing to what
they wanted it to be. [Tr. 483]. In 2014, After DI Gonzales brought to
Ms. Jones' attention the high prices the pharmacy was charging for
controlleds, Jones Pharmacy started using the First Databank pricing,
AWP plus the dispensing fee. [Tr. 483]. Prices vary based on the AWP at
the time. [Tr. 483-484]. Often times AWP prices can be high. [Tr. 483-
484].
172. Jones Pharmacy started using E-FORCSE in 2011. [Tr. 615]. E-
FORCSE is the Electronic-Florida Online Reporting of Controlled
Substance Evaluation Program monitoring system. The system shows which
pharmacies a patient went to, and the medication and/or controlled
substances the patient received. [Tr. 228].\64\ Before E-FORCSE, Jones
Pharmacy used wholesalers that required it to enter the patients into a
prescription monitoring program (``PMP'') report. Ms. Jones testified
that she thought the only people that order from those same wholesalers
fed into the system, and then you could look at the patient's fill
history. [Tr. 615-616].
---------------------------------------------------------------------------
\64\ The Florida E-FORCSE website indicates that the system was
created in 2009 by the Florida Legislature to ``encourage safer
prescribing of controlled substances and to reduce drug abuse and
diversion within the state of Florida.'' Florida Health E-FORCSE
Homepage, http://www.floridahealth.gov/statistics-and-data/e-forcse/
( last visited Apr. 10, 2015). Specifically, E-FORCSE ``collects,
maintains, and stores controlled substance prescription dispensing
information in its database and makes the information available to
health care practitioners and law enforcement and regulatory
agencies during active investigations.'' [Id.].
---------------------------------------------------------------------------
173. Ms. Jones first heard about red flags for diversion when
Florida Department of Health Inspector Robert Di Fiore inspected the
Jones Pharmacy on May 14, 2014. [Tr. 484-485; Resp. Exh. 8, at 2].
174. Jones Pharmacy dispensed controlled substances to patient H.L.
up until July 2014. [Tr. 495-496; Resp. Exh 11, at 2]. Jones Pharmacy
noted that patient H.L. was taking the same medication every month, and
patient H.L. became verbally abusive if her prescription was ``not
ready or done her way.''[Tr. 495]. Due to this Jones Pharmacy stopped
filling prescriptions for patient H.L., but other pharmacies continued
to fill prescriptions for her. [Tr. 496; Resp. Exh. 11, at 2].
175. Ms. Jones stated that when Jones Pharmacy opened, it was not
calling the prescriber to ascertain a patient's diagnosis. [Tr. 513].
This practice was consistent with Ms. Jones' experience in retail
pharmacy. [Tr. 514-515]. Later, Ms. Jones instituted a policy of
calling the prescriber and asking for a patient's diagnosis. [Tr. 513].
Ms. Jones presented examples of situations wherein the pharmacy called
the doctor to ensure he authored the prescription, ascertained the
patient's diagnosis, and recorded it on the prescription. [Tr. 512-517,
524-527; 532-534; Gov't Exh 17, 22, 24].
176. Ms. Jones testified that she did not believe in any way that
any of the prescriptions at issue in these proceedings were going to be
diverted after they were filled. [Tr. 517-518, 524].
177. Ms. Jones stopped filling prescriptions for certain
individuals after the May 2014 Florida Department of Health
Investigation. [Tr. 538]. Inspector Crane brought to Ms. Jones'
attention the fact that certain patients coming to Jones Pharmacy had
drug related arrest records. [Tr. 537-538]. Ms. Jones used the Broward
County court website to look up patient names and determine if a
patient had an arrest record. [Tr. 538]. From this information, Ms.
Jones determined that certain patients had drug charges in their
criminal records, and she refused to fill prescriptions for these
individuals. [Tr. 538, 540-541].
178. Ms. Jones credibly testified that her practices today are
different from those when she first opened Jones Pharmacy. [Tr. 519].
First, Ms. Jones dispenses much less controlled substances. [Tr. 565;
Resp. Exh 4]. Her main business is from non-controlled substances that
the pharmacy sells. [Tr. 564-565]. Second, in the event that Jones
Pharmacy is presented with a prescription similar to the ones at issue
in this proceeding, Ms. Jones stated that she would do things
differently. [Tr. 520-523]. She would look at the prescribing doctor's
credentials, the patients history in the monitoring system, speak with
the doctor's office, questioning why a patient is coming from out of
state to have a prescription filled, and require documentation
substantiating an out of state patients reason for fill. [Tr. 520-523;
Tr. 544-545]. Ms. Jones also stated that she will not fill for cash
only patients unless the patient presents a ``really good reason.''
[Tr. 541]. Ms. Jones stated the number of patients paying with cash
have diminished significantly. [Tr. 565, 568-569; Resp. Exh. 4].
179. Ms. Jones now has a written policy for how employees are to
evaluate controlled substance prescriptions. [Tr. 555-556; Resp. Exh.
26]. Ms. Jones testified that Jones Pharmacy's new operational policies
and procedures establish clear guidelines for how the pharmacy receives
controlled substances, dispenses them to patients, evaluates the
legitimacy of a prescription, verifies the prescription, what is done
for pick-
[[Page 79214]]
ups, drop offs, and the protocol to follow if the pharmacy decides not
to fill a prescription. [Tr. 555-556; Resp. Exh. 26]. The new policy
and procedures guide is dated January 4, 2015. [Tr. 556; Resp. Exh.
26].
180. When testifying about pricing procedures, Ms. Jones admitted
that she marked up controlled and non-controlled substances. [Tr. 680-
681]. In fact, Ms. Jones stated that she marked up ``most of the
controlleds.'' [Tr. 682].
H. Ms. Donna Horn (Respondents' Expert)
181. Donna Horn testified for the Respondent, and was recognized as
an expert in pharmacy, pharmacy operations, and regulatory compliance
for pharmacies. [Tr. 725, 737; Resp. Exh 24]. Ms. Horn lives in
Norwood, Massachusetts. [Tr. 713]. Ms. Horn graduated from
Massachusetts College of Pharmacy in Boston, Massachusetts in 1983.
[Tr. 714]. She then worked for Osco, a national pharmacy chain, as a
pharmacist and pharmacy manager for many years. [Id.]. Eventually Osco
was sold to Brooks Pharmacy, and Ms. Horn worked for Brooks as a
regional pharmacy manager. [Tr. 714-715]. It was her job to ready and
transition 28 stores that she was supervising to the Brooks system of
operations. [Id.]. When that was completed, Ms. Horn became the manager
of regulatory affairs for Brooks. [Id.]. In that role, Ms. Horn ensured
that the policies and procedures for the Brooks pharmacies were in
compliance with the state regulations. [Tr. 716]. Then, in 2006, Ms.
Horn went to work for the Institute for Safe Medication Practices. [Tr.
717]. The institute conducts studies in medication errors that occur in
hospitals and pharmacies. The institute also does continuing education
(``CE''). [Tr. 717]. Ms. Horn also writes articles for journals, and
has served on the Massachusetts Board of Pharmacy for 11 years. [Tr.
717-718]. In 1995, Ms. Horn was elected to the executive committee of
the National Association of Boards of Pharmacy (``NABP''). [Tr. 720]
All boards of pharmacy in the United States are members of NABP. [Tr.
720]. At NABP, Ms. Horn wrote model rules and regulations in
conjunction with stakeholders and experts in the field. [Tr. 720-721].
When Ms. Horn was president of NABP, her platform was ``reducing
medication errors in community pharmacies.'' [Tr. 735]. Ms. Horn
currently holds a pharmacy license in Massachusetts. [Tr. 722]. Ms.
Horn is also an adjunct faculty member of the Massachusetts College of
Pharmacy. [Tr. 724]. She has been qualified as an expert in Federal and
State courts. [Tr. 725; Resp. Exh 24]. Ms. Horn's experience reflects
that she is very experienced in the prevention of Medication safety and
errors. [Tr. 723, 728, 730-731; Resp. Exh. 24 at 5-9]. In fact, Ms.
Horn indicated that patient safety and medication risk management is a
passion of hers. [Tr. 723]. The last prescription Ms. Horn filled was
in 2000 or 2001. [Tr. 794].
182. Ms. Horn testified that she talked with Ms. Jones, reviewed
the documents in this case, and noticed that Ms. Jones has adapted her
pharmacy policies to make a much more comprehensive and complete
approach to compliance with the applicable regulations. [Tr. 743-744].
183. Ms. Horn testified that Ms. Jones' policies and procedures
[are] ``a great example of what should be done in order to prevent the,
prevent the fraudulent filling of controlled substances.'' [Tr. 744;
Resp. Exh. 25].
184. With regard to the dispensing of prescriptions in 2010, Ms.
Horn stated that the dispensing pharmacist should have looked at the
patient who is getting the prescription and recorded a complete patient
history. [Tr. 748]. Ms. Horn also stated that, in 2010, a pharmacist
needed to know a patient's drug allergies, what the patient was being
treated for, and other medications the patient was on, and who the
prescriber was. [Id.]. Ms. Horn further testified that the pharmacist
would look at the actual prescription itself for the quantity and
frequency of what's being dispensed to see if it makes sense. [Tr.
749].
185. Prior to 2014, Ms. Horn had not seen anything published by the
DEA concerning the dispensing of controlled substances to out-of-state
customers. [Tr. 752]. In May of 2014, Ms. Horn attended a presentation
at the NABP annual meeting where the DEA displayed a video vignette on
``red flags.'' [Tr. 751]. The intent of the video was to have every
state board of pharmacy publish a link to the video on their respective
websites. [Tr. 752]. Ms. Horn stated that she did not believe that the
DEA had published anything relating to red flags on their website in
2010 or 2011 because there is nothing on it today. [Tr. 752-753]. Ms.
Horn stated that the May 2014 meeting was the first time she ``heard of
the red flags and saw them played out in a movie.'' [Tr. 752]. Ms. Horn
did acknowledge that in 2012, the DEA published a legal opinion on its
website that referred to ``red flags.'' [Tr. 753]. Ms. Horn consulted
some of the DEA administrative opinions in determining what was
generally known among pharmacists in 2009-2011. [Tr. 872-873]. Ms. Horn
claimed that the first time the concept of ``red flags'' was widely
known among pharmacists was in relation to the video vignette released
in May of 2014. [Tr. 751-752].
186. Ms. Horn opined that, in 2010, it was not widely known among
pharmacists that patients travelling long distances, seeking to pay
cash, presenting combinations of narcotics, benzodiazepines, and
carisoprodol, and presenting pattern prescriptions were indicators of
abuse and/or diversion of controlled substances. [Tr. 864-866].
187. Ms. Horn reviewed the State of Florida Department Of Health
Investigative Services inspection reports in forming her opinions. [Tr.
759, 761; Resp. Exh. 8].
188. Ms. Horn stated that she looked at the DEA Form 222's in this
matter, and she believed that the forms were in compliance with the
applicable regulations. [Tr. 773; Resp. Exh. 27]. She stated that
Respondent's method of recordkeeping is compliant with the regulations,
both federal and state. [Id].
189. Ms. Horn testified that some combinations of drugs that are
labeled as ``cocktail drugs'' may be taken together for legitimate
medical reasons, and often are taken together. [Tr. 777].
190. Ms. Horn did not opine on any of the Government-presented
prescriptions. [Tr. 780; Gov't Exh. 15-23]. Ms. Horn stated that she
did not review any of the prescriptions at issue from 2010-2012. [Tr.
806]. Ms. Horn indicated that she has not done any research about the
corresponding responsibility of a pharmacist. [Tr. 799]. Ms. Horn also
indicated that she has not given any presentations about the
corresponding responsibility of a pharmacist since 2007. [Tr. 799].
Further, Ms. Horn indicated that she has not published any research on
corresponding responsibility issues. [Tr. 797-798].
191. Ms. Horn testified that she agreed with the procedures that
Ms. Jones was using in 2010. [Tr. 781]. Ms. Horn stated that she
believed Ms. Jones' procedures were in conformity with what the DEA
expected a pharmacist to do to prevent diversion in 2010. [Id.].
192. Ms. Horn testified that Jones Pharmacy has displayed a
``positive trend downwards as to the amount of controlleds that are
dispensed per non-controlleds.'' [Tr. 785]. Ms. Horn further testified
that she believed Ms. Jones is ``aware now that people are not as
honest as she thought that they were and that she's made steps to get
those people out of her business.'' [Tr. 786].
193. Ms. Horn testified that she did not review any of the Florida
rules regarding the use or misuse of
[[Page 79215]]
prescriptions in preparation for her testimony. [Tr. 805-806].
194. Ms. Horn stated that her opinion in this case, that Ms. Jones
should maintain her DEA registration, is based on her conversations
with Ms. Jones. [Tr. 806-808]. Ms. Horn stated that Ms. Jones has
learned a lot from the time she opened Jones Pharmacy, and ``she
understands what her responsibilities are. They are much more clear to
her now. The conversations that I've had with her, I truly believe she
would not go to filling those prescriptions and she would certainly
take into [sic] affect any other DEA red flags that you come up with,
she would use those in determining, as long as she knows about them, in
determining whether or not to fill a prescription. I truly believe
that.'' [Tr. 807]. Ms. Horn opined Ms. Jones' current dispensing
practices are ``very much in line with what [Ms. Horn] would expect to
see at a community pharmacy.'' [Tr. 785-786].
195. Ms. Horn did not offer any opinions as to whether or not Jones
Pharmacy's dispensing of controlled substances was abnormal in 2010,
2011, and 2012. [Tr. 809]. Similarly, Ms. Horn did not opine about the
practice of dispensing controlled substances to out of state persons
and the prices charged for controlled substances for the timeframe 2010
through 2012. [Tr. 810-812]. Ms. Horn stated that she thinks Ms. Jones
``did exercise her corresponding responsibility in 2014.'' [Tr. 809].
196. Ms. Horn testified that Jones Pharmacy's unwritten 2010 policy
of calling the prescribing doctor--to certify that the doctor authored
the prescription himself--indicated that the pharmacy was exercising
its corresponding responsibility to ensure controlled substances were
issued for a legitimate medical purpose under federal law. [Tr. 827;
Resp. Exh. 25]. Ms. Horn further testified that merely calling the
doctor was not enough, it ``is also imperative that you have a
discussion to talk about what is the diagnosis and what is the
treatment going to be.'' [Tr. 829]. Ms. Horn further stated that the
above listed protocols are ``all [she] knows about what was expected of
a corresponding responsibility up until the time [the DEA] came up with
these other red flags that would also help a pharmacist determine
whether or not a prescription should be filled or not.'' [Tr. 829].
197. Ms. Horn liked the Respondent's more recent policies better
than her earlier policies because the policies have been ``updated to
reflect new knowledge of diversion tactics.'' [Tr. 832; Resp. Exh. 26].
This new policy was enacted in 2015. [Tr. 833]. Ms. Horn opined that
Ms. Jones has changed ``policies and procedures as she [has] learned
about things.'' [Tr. 850].
198. Ms. Horn stated that in 2010 it was not widely known in the
pharmacy community that certain drugs or combinations of cocktails were
indicative of abuse or diversion. [Tr. 864]. Ms. Horn also stated that
in 2010 it was not widely known in the pharmacy community that paying
cash was an indicator of abuse or diversion rather than using
insurance. [Tr. 864]. Ms. Horn stated that in 2010 it was not widely
known in the pharmacy community that pattern prescribing--``patients
going to the same doctor for the same ailments, receiving the same
prescriptions in the same quantity without any difference in the
treatment'' [Tr. 865]--was an indicator of abuse or diversion. [Tr.
865]. Ms. Horn stated that in 2010 it was not widely known that Xanax 2
mg was only used in rare circumstances. [Tr. 865-866].
V. Conclusions of Law and Discussion
A. Position of the Parties
1. The Government's Position
On April 20, 2015, the Government timely filed its lengthy (eighty-
one page) Government's Proposed Findings Of Fact And Conclusions Of Law
(``Gov't Brief''). In it, the Government urged me to accept the
following conclusions of law: (1) the dispensing practices at Jones
Total Health Pharmacy LLC are an appropriate basis to deny SND
Healthcare LLC's application for a DEA registration; (2) Jones Pharmacy
committed acts that render its continued registration inconsistent with
the public interest; and (3) Respondents have not credibly accepted
responsibility or undertaken meaningful remedial measures. [Gov't Br.
42-79].
First, as support for its argument that the dispensing practices at
Jones Pharmacy are an appropriate basis to deny SND Healthcare LLC's
application for a DEA registration, the Government avers that Jones
Pharmacy and SND Healthcare are appropriately treated as one integrated
enterprise for purposes of this proceeding. [Gov't Br. 42]. The
Government states that ``[t]he DEA has denied an application by one
business entity for a DEA COR as being inconsistent with the public
interest, 21 U.S.C. 823(f), based on a separate, related business
entity's dispensing conduct [sic] were it could find that the two were
`nominally separate business entities.''' [Gov't Br. 42 (citing MB
Wholesale, Inc., 72 Fed. Reg. 71,956, 71,958 (DEA 2007))]. The
Government further states that SND Healthcare is essentially an
expansion of Jones Pharmacy into Miami and the two entities can fairly
be considered one `integrated enterprise' [because] . . . the
ownership, management, and retail pharmacy operations of Jones Pharmacy
and SND Healthcare are centralized with Cherese Jones.'' [Gov't Br.
43]. Due to this, the Government argues that there is ``no basis in
evidence or logic for imposing different sanctions for SND Healthcare
and Jones Pharmacy or treating them as anything other than the
integrated enterprise they are.'' [Gov't Br. 43-44].
Second, the Government argues that Jones Pharmacy committed acts
that render its continued registration inconsistent with the public
interest. [Id.]. Here, the Government avers that Jones Pharmacy filled
over a hundred prescriptions for controlled substances that presented
indicia of diversion and abuse. [Gov't Br. 45]. As support, the
Government cites prescriptions in Government Exhibits 15-24, and
explains that these prescriptions displayed ``red flags'' that were
indicators of diversion and abuse. [Gov't Br. 45-46]. These ``red
flags'' consisted of customers traveling long distances (often from out
of state), cash payments, pattern prescribing, prescriptions for
immediate release pain medications in two different strengths or with
no accompanying long-acting pain medications, and prescriptions for
common cocktail medications. [Id.]. The Government also contends that
Jones Pharmacy charged exorbitant cash prices for its ``highly diverted
narcotics'' by citing an example wherein Jones Pharmacy charged ``one
patient $9, $10, or $11 a pill--mark-ups of over 3,000% over Jones
Pharmacy'[s] cost to obtain these drugs--when it was filling
prescriptions from a doctor who literally used a rubber stamp to
prescribe oxycodone.'' [Gov't Br. 48]. The Government states that these
``red flags'' presented ``were not feasibly resolvable by a pharmacist
operating within the accepted bounds of the profession exercising the
responsibility to ensure that they were filling only legitimate
controlled substance prescriptions.'' [Gov't Br. 49].
Along these lines, the Government states that Jones Pharmacy's
dispensing patterns, prices, and profits show that filling suspicious
controlled substance prescriptions was its chosen business model, and
the filling of these controlled substances was Jones' primary business.
[Gov't Br. 49-52]. The Government further avers that Ms. Jones knew or
had reason to know of the Pharmacy's unlawful dispensing, and her
claimed ignorance of abuse and
[[Page 79216]]
diversion is neither a credible nor a legally viable defense. [Gov't
Br. 53]. The Government then argues that Ms. Jones' purported
naivet[eacute] ``simply cannot be squared with the objective
evidence,'' [Id.] and requests that I find that ``Ms. Jones was not
credible when she portrayed herself as `dumb, na[iuml]ve, [and] stupid'
because this description cannot be squared with the profits she made
and the prices she charged in 2010, 2011, and 2012.'' [Gov't Br. 58].
Next, the Government explains that the testimony of Respondent's
expert, Ms. Horn, is neither credible nor grounded in any professional
experience with regard to pharmacists general ignorance of red flags.
[Gov't Br. 59]. Here, the Government contests Ms. Horn's ``professional
exposure to issues involving a pharmacist's corresponding
responsibility have been spare, sporadic, and sparse.'' [Id.]. The
Government cites facts such as Ms. Horn has never filled prescriptions
in Florida, and Ms. Horn last practiced as a pharmacist filling
prescriptions fifteen years ago. [Gov't Br. 60]. Finally, the
Government states that accepting Ms. Horn's conclusion that ``red
flags'' were a mystery in 2010 would upend this Agency's prior opinions
and the expertise on which they were based. [Gov't Br. 65].
As additional support for its assertion that Jones Pharmacy
committed acts that render its continued registration inconsistent with
the public interest the Government states that Jones Pharmacy's
inventories and records were deficient. [Gov't Br. 65]. Specifically,
the Government alleges that the Respondent's inventories did not
include whether they were taken at the beginning or end of the day, the
number of commercial containers or dosage units per container, and what
was received at the pharmacy for 480 orders of controlled substances.
[Gov't Br. 66]. Citing these violations, the Government states
``[a]lthough revocation and denial of Respondents' registrations is
justified based on Jones Pharmacy's dispensing practices alone,
recordkeeping deficiencies provide yet more reason to support this
determination.'' [Gov't Br. 68].
Last, the Government argues that Respondents have not credibly
accepted responsibility or undertaken meaningful remedial measures.
[Gov't Br. 68]. The Government contends that Ms. Jones refused to admit
responsibility for her past conduct, and revealed ignorance of her
responsibilities that persists to this day. [Gov't Br. 69]. The
Government avers that Ms. Jones' statements that she `` `could have
done more' to prevent abuse and diversion'' place her as a third party
bystander to wrongdoing. [Gov't Br. 72]. The Government states that Ms.
Jones testimony ``that she viewed, and continues to view, this as a
prescriber's responsibility is a blatant attempt to shift blame to
others, not accept it for herself.'' [Id.]. Further, the Government
states that Jones Pharmacy offered no credible evidence of remedial
efforts because Respondent's attempt to show that it had a dramatic
decline in controlled substances dispensing ``coincided with (1) the
decision to stop servicing out-of-state customers in April 2011 and (2)
after the DEA started investigating Jones Pharmacy in April 2013.''
[Gov't Br. 78]. Finally, the Government urges me to find that ``Jones
Pharmacy's changes in dispensing practices reflect law enforcement's
scrutiny of Jones Pharmacy rather than Jones Pharmacy's scrutiny of its
customers.'' [Id.].
2. The Respondent's Position
On April 20, 2015, the Respondents timely filed their Respondents'
Post-Hearing Brief. (``Resp. Brief''). Therein, the Respondent averred
that Jones Pharmacy's continued registration is not inconsistent with
the public interest, and that the Respondents have presented evidence
to mitigate any evidence that shows that their registrations threaten
the public interest. [Resp. Br. 29-37].
First, in addressing their contention that Jones Pharmacy's
continued registration is not inconsistent with the public interest,
the Respondents argue that public interest factors 1 and 3 clearly
weigh in Respondent's favor. [Resp. Br. 29]. As support, the
Respondents state that they currently hold a valid Florida license, and
that the Florida Board of Pharmacy has not initiated any action against
their license since its issuance in 2009. [Resp. Br. at 29-30].
Respondents also state that there is ``no evidence in the record that
the Respondent or its owner/operator has ever been convicted (or
charged with) a crime related to the manufacture, distribution, or
dispensing of controlled substances. [Resp. Br. 30].
Next, Respondents address public interest factor two by explaining
that their experience in dispensing controlled substances has changed
considerably from 2010 until now. [Resp. Br. 30]. The Respondents state
that ``[i]n 2010, controlled substance dispensing constituted 63% of
Jones' dispensing. This percentage steadily declined and as of the end
of 2014, controlled substance dispensing was only at seventeen percent
(17%).'' [Resp. Br. 30]. Respondents also state that their cash
business has been significantly reduced from 2010 to 2014, and that
Jones Pharmacy has ``completely changed the way that it conducts its
business with regard to controlled substances.'' [Resp. Br. 31].
The Respondents also argue that public interest factor four is in
their favor because ``[a]t all times during the period at issue,
Respondents sought to comply with state and federal laws relating to
controlled substances.'' [Resp. Br. 31]. Here the Respondents argue
that there was no specific legal standard that defined ``red flags''
that a pharmacist was expected to recognize and act upon. [Resp. Br.
32]. As support, the Respondents cite the testimony of Ms. Donna Horn,
Respondents' expert witness. [Id.]. Respondents state that Ms. Horn
``testified that it was her opinion that Ms. Jones complied with her
corresponding responsibility as she understood it at the time by taking
the actions that she took to check the validity of the prescriptions.''
[Id.]. These procedures included verifying the individuals presenting
the prescriptions, verifying the physician's office and identifying who
spoke on behalf of the physician, verifying that the physicians'
licenses were active, and obtaining the diagnosis. [Resp. Br. 32].
Respondents further aver that public interest factor five also
weights in their favor. [Resp. Br. 33]. Respondents argue that their
continued registration and granting of pending registration will not
threaten the public safety because there is evidence in the record that
reflects Jones Pharmacy's compliance with the law, including the
Florida Department of Health inspections. [Resp. Br. 33-34]. Further,
Respondents argue that their expert, Ms. Donna Horn, testified that
Respondents continued registration would not be inconsistent with the
public interest. [Resp. Br. 33].
Last, Respondents argue that even though they do not concede that
the DEA has met its burden in this instance, Respondents have met their
burden to show that their registrations do not threaten the public
interest. [Resp. Br. 34]. First, Respondents aver that they have
accepted responsibility for their actions through the testimony of Ms.
Jones. [Resp. Br. 34-35]. Second, Respondents state that they have
``demonstrated through [their] actions that [they have] taken remedial
measures to insure future compliance'' with the law. [Resp. Br. 35].
The Respondents explain that their remedial measures include:
(1) ceasing to fill out of state prescriptions; (2) implementing a
policy to ensure prevention of fraudulent dispensing; (3)
supplementing the procedure for calling physician offices; (4)
verifying physician
[[Page 79217]]
practice areas; (5) reviewing the distances traveled between a
patient and the physician writing the prescription; (6) reviewing
the distance traveled between the customer and the Pharmacy; (7)
reviewing on E-FORSCE other locations at which customers are filling
prescriptions; (8) implementing new written policies and procedures;
(9) ceasing to accept cash payments for controlled substance
prescriptions; (10) refusing to fill prescriptions for certain
individuals with criminal backgrounds; and substantially reducing
business relating to the filling of prescriptions for controlled
substances.
[Resp. Br. 36]. Respondents contend that the majority of these actions
were taken without prompting from regulators. [Id.]. Third, Respondents
claim that their recordkeeping also affects public interest factor
four. [Id.]. To this end, the Respondents state that they have remedied
the initial glitches in the ordering system, and that the ``record
evidence reflects that Jones Total Health now maintains inventories in
accordance with [DEA] requirements.'' [Resp. Br. 37].
In Conclusion, the Respondents request that I find that their
continued registration is not inconsistent with the public interest,
and that they have presented sufficient evidence to mitigate any
evidence that shows that their registrations threaten the public
interest. [Resp. Br. 29-37].
B. Statement of Law and Discussion
Pursuant to 21 U.S.C. Sec. 824(a)(4), the Administrator \65\ may
revoke a registration, and deny a pending application for renewal or
modification, if she determines that the continuation or issuance of
such registration would be ``inconsistent with the public interest'' as
determined pursuant to 21 U.S.C. Sec. 823(f). Section 823(f) requires
that the following factors be considered:
---------------------------------------------------------------------------
\65\ The Administrator has the authority to make such
determinations pursuant to 28 C.F.R. Sec. Sec. 0.100(b) and 0.104
(2014).
---------------------------------------------------------------------------
(1) The recommendation of the appropriate State licensing board or
professional disciplinary authority.
(2) The [registrant's] experience in dispensing, or conducting
research with respect to controlled substances.
(3) The [registrant's] conviction record under Federal or State
laws relating to the manufacture, distribution, or dispensing of
controlled substances.
(4) Compliance with applicable State, Federal, or local laws
relating to controlled substances.
(5) Such other conduct which may threaten the public health and
safety.
[21 U.S.C. Sec. 823(f); see also Alexander Drug Co., 66 Fed. Reg.
18, 299, 18,302 (DEA 2001); Nicholas A. Sychak, d/b/a Medicap Pharmacy,
65 Fed. Reg. 75,959, 75,967 (DEA 2000)]. These factors may be
considered in the disjunctive: the Administrator may properly rely on
any one or a combination of these factors, and may give each factor the
weight she deems appropriate, in determining whether a registration
should be revoked or an application for registration denied. [See
Direct Wholesale, 69 Fed. Reg. 11,654, 11,655 (DEA 2004); Henry J.
Schwarz, Jr., M.D., 54 Fed. Reg. 16,422, 16,424 (DEA 1989)].
The applicable regulations state that the test for the proper
prescribing and dispensing of controlled substances is as follows:
A prescription for a controlled substance to be effective must be
issued for a legitimate medical purpose by an individual
practitioner acting in the usual course of his professional
practice. The responsibility for the proper prescribing and
dispensing of controlled substances is upon the prescribing
practitioner, but a corresponding responsibility rests with the
pharmacist who fills the prescription.
[21 C.F.R. Sec. 1306.04(a)]. Thus, for a prescription to be lawful, it
needs to be written for a legitimate medical purpose in the
practitioner's usual course of professional practice. Id. The
pharmacist has a corresponding responsibility to verify the validity of
a prescription, and if a prescription seems suspect, the pharmacist
should not fill it. [Id. See also United Prescription Services, Inc.,
72 Fed. Reg. at 50,397, 50,407 (DEA 2007)].
DEA prohibits a pharmacist from filling a prescription for
controlled substances when he either ``knows or has reason to know that
the prescription was not written for a legitimate medical purpose.''
[United, 72 Fed. Reg. at 50,407; Medic-Aid Pharmacy, 55 Fed. Reg.
30,043, 30,044 (DEA 1990); see also Frank's Corner Pharmacy, 60 Fed.
Reg. 17,574, 17,576 (DEA 1995); Ralph J. Bertolino, 55 Fed. Reg. 4,729,
4,730 (DEA 1990); United States v. Seelig, 622 F.2d 207, 213 (6th Cir.
1980)]. This Agency has further held that ``[w]hen prescriptions are
clearly not issued for legitimate medical purposes, a pharmacist may
not intentionally close his eyes and thereby avoid [actual] knowledge
of the real purpose of the prescription.'' [Bertolino, 55 Fed. Reg. at
4,730 (citations omitted)].
With regard to a Pharmacy's conduct, DEA has consistently held that
a retail store operates under the control of its owners, stockholders,
or other employees, and therefore the conduct of these individuals is
relevant in evaluating the fitness of an applicant. [See e.g., Rick's
Pharmacy, 62 Fed. Reg. 42,595 (DEA 1997); Big T Pharmacy, 47 Fed. Reg.
51,830 (DEA 1982)].
In a pharmacy case to revoke a pharmacy registrant's certificate,
the DEA has the burden of proving that the requirements for revocation
are satisfied. [21 C.F.R. Sec. 1301.44(e)]. Once the Government has
proven its prima facie case, the burden of proof shifts to the
Respondent. [Arthur Sklar, R.Ph., d/b/a King Pharmacy, 54 Fed. Reg.
34623, 34627 (DEA 1989)]. To rebut such a case the Respondent ``is
required not only to accept responsibility for [the established]
misconduct, but also to demonstrate what corrective measures [have
been] undertaken to prevent the reoccurrence of similar acts.''
[Holiday CVS, 77 Fed. Reg. at 62, 339 citing Jeri Hassman, M.D., 75
Fed. Reg. at 8,194, 8,236 (DEA 2010)].
Along these lines, in situations where a registrant has had a
lengthy history of violations, the U.S. Courts of Appeal have upheld
the Agency's conclusions that past performance is the best predictor of
future performance. [Alra Labs. v. DEA, 54 F.3d 450, 452 (7th Cir.
1995)].
1. Factor One: Recommendation of State Licensing Board
The record contains no recommendations from the State licensing
board regarding these Respondents. Further, the record contains no
evidence that the Respondents had any adverse State Board action taken
against them. Lastly, the record contains no evidence that Ms. Jones
had any adverse action taken by the State Board against her.
Recommendations of state licensing boards are relevant, but not
dispositive, in determining whether a respondent should be permitted to
maintain a registration. [See Gregory D. Owens, D.D.S., 74 Fed. Reg.
36,751, 36,755 (DEA 2009); see also Martha Hernandez, M.D., 62 Fed.
Reg. 61,145, 61,147 (DEA 1997)]. According to clear Agency precedent, a
``state license is a necessary, but not a sufficient condition for
registration.'' [Robert A. Leslie, M.D., 68 Fed. Reg. at 15,230; John
H. Kennedy, M.D., 71 Fed. Reg. 35,705, 35,708 (DEA 2006)]. The ultimate
responsibility to determine whether a registration is consistent with
the public interest has been delegated exclusively to the DEA, not to
entities within state government. [Edmund Chein, M.D., 72 Fed. Reg.
6,580, 6,590 (DEA 2007), aff'd Chein v. DEA, 533 F.3d 828 (D.C. Cir.
2008)].
I therefore conclude that the fact that the record does not contain
evidence of a recommendation by a state licensing board does not weigh
for or against a determination as to whether the
[[Page 79218]]
Respondents' continued registration is consistent with the public
interest. [See Top Rx, 78 Fed. Reg. 26,069, 26,081 (DEA 2013)].
2. Factors Two and Four: Registrant's Experience in Dispensing
Controlled Substances, and Compliance With Applicable State, Federal,
or Local Laws Relating to Controlled Substances
Because the Respondents' experience in dispensing controlled
substances is related to their compliance with state and federal law,
factors two and four will be considered together. [See, e.g., KK
Pharmacy, 64 Fed. Reg. 49,507, 49,510 (DEA 1999); Service Pharmacy, 61
Fed. Reg. 10,791, 10,795 (DEA 1996)].
a. Recordkeeping Violations
Recordkeeping is one of the CSA's essential tenets. For a
``registrant's accurate and diligent adherence to this obligation is
absolutely essential to protect against the diversion of controlled
substances.'' [Paul H. Volkman, 73 Fed. Reg. 30,630, 30,644 (DEA 2008),
aff'd 567 F.3d 215, 224 (6th Cir. 2009)]. Accomplishing this requires
``every registrant manufacturing, distributing, or dispensing a
controlled substance or substances [to] maintain, on a current basis, a
complete and accurate record of each such substance manufactured,
received, sold, delivered, or otherwise disposed of by him.'' [21
U.S.C. Sec. 827(a)(3)].
In this manner, the Agency has consistently ``held that the failure
to comply with recordkeeping requirements is a basis for revoking a
registration. [Alexander Drug Co., 66 FR at 18,299, 18,303 (DEA 2001)
citing Singers-Andreini Pharmacy, Inc., 63 FR 4,668 (DEA 1998); Arthur
Sklar, 54 FR at 34,623; Summer Grove Pharmacy, 54 FR 28,522 (DEA 1989);
The Boro Pharmacy and Bell Apothecary, 53 FR 15,151 (DEA 1988)]. Such
lack of accountability is clearly not acceptable for a DEA registrant.
[Alexander Drug, 66 FR at 18,303-04; Volkman, 73 FR at 30,644 (holding
that recordkeeping violations alone supported denial of practitioner's
application)].
Here, Jones Pharmacy was missing some of its required recordkeeping
information. [FOF 84-85]. Specifically, the Respondents violated
recordkeeping requirements by failing to record whether Jones
Pharmacy's biennial inventory was taken at the opening or close of
business, and by failing to indicate the number of tablets per opened
commercial container, the number of tablets shipped in each commercial
container, and the number of commercial containers that Ms. Jones had
on hand. [FOF 84-85; 21 CFR Sec. 1304.11(e)(3)].\66\ Such lack of
accountability violates the DEA's regulations and the requisite closed
system of distribution of controlled substances, for without such a
complete inventory, the DEA is unable to conduct an accurate
accountability audit. Although the inventory was complete in other
aspects, Ms. Jones' partial compliance does not obviate her failure to
record the required information on the biennial inventory.
---------------------------------------------------------------------------
\66\ 21 CFR Sec. 1304.11 lists the controlled substances
inventory requirements. As part of the requirements, subsection (a)
lists that ``[t]he inventory may be taken either as of opening of
business or as of the close of business on the inventory date and it
shall be indicated on the inventory.'' Further, Sec. 1304.11(e)(3)
lists the applicable inventory requirements for controlled substance
dispensers. Specifically, the regulation states:
Each person registered or authorized to dispense . . .
controlled substances shall include in the inventory the same
information required of manufacturers pursuant to paragraphs
(e)(1)(iii) and (iv) of this section. In determining the number of
units of each finished form of a controlled substance in a
commercial container that has been opened, the dispenser . . . shall
do as follows:
(i) If the substance is listed in Schedules I or II, make an
exact count or measure of the contents; or
(ii) If the substance is listed in Schedule III, IV, or V, make
an estimated count or measure of the contents, unless the container
holds more than 1,000 tablets or capsules in which case he/she must
make an exact count of the contents.
Sec. 1304.11(e)(3).
The applicable portion of Sec. 1304.11(e)(1)(iii) and (iv)
states:
(iii) For each controlled substance in finished form the
inventory shall include:
(A) The name of the substance; (B) Each finished form of the
substance (e.g., 10-milligram tablet or 10-milligram concentration
per fluid ounce or milliliter); (C) The number of units or volume of
each finished form in each commercial container (e.g., 100-tablet
bottle or 3-milliliter vial); and
(D) The number of commercial containers of each such finished
form (e.g. four 100-tablet bottles or six 3-milliliter vials).
(iv) For each controlled substance not included in paragraphs
(e)(1) (i), (ii) or (iii) of this section (e.g., damaged, defective
or impure substances awaiting disposal, substances held for quality
control purposes, or substances maintained for extemporaneous
compoundings) the inventories shall include:(A) The name of the
substance; (B) The total quantity of the substance to the nearest
metric unit weight or the total number of units of finished form;
and (C) The reason for the substance being maintained by the
registrant and whether such substance is capable of use in the
manufacture of any controlled substance in finished form.
Sec. 1304.11(e)(1)(iii-iv).
---------------------------------------------------------------------------
Thus, the Respondent's lack of attention to detail with its
accountability of the controlled substances received and dispensed is
adequate grounds for recommending revocation of Jones Pharmacy's
registration. [Alexander Drug Co., 66 FR at 18,299, 18,303 (DEA 2001)
citing Singers-Andreini Pharmacy, Inc., 63 FR 4,668 (DEA 1998)].
b. Red Flags
The term ``red flags'' does not appear in the Controlled Substances
Act, DEA regulations, or the DEA's Pharmacist Manual. [FOF 121].
However, the Government's expert, Dr. Tracy Gordon, indicated that the
term ``red flags'' was generally known to Florida Pharmacists between
2010 and 2012. [FOF 109, 111 & n. 13]. The Respondent's expert, Ms.
Donna Horn, indicated that the general pharmacist community was unaware
of the ``red flags'' cited in this case between the 2010 and 2012. [FOF
185-186]. Here, I find Dr. Tracy Gordon's opinion more credible on this
point, for Dr. Gordon's experience as a licensed Florida pharmacist who
practiced as an Assistant Pharmacy Manager in Florida during the period
2010-2012 infers that she has knowledge of what pharmacists knew during
this time. [FOF 106-111 & fn. 13].
The DEA has established a test for determining whether the
Respondent's corresponding responsibility has been met in circumstances
where the prescriptions raise red flags of potential improper
prescribing. This three-part test is articulated as follows:
Because Agency precedent limits the corresponding responsibility
to circumstances which are known or should have been known
[citations omitted], it follows that, to show a violation of a
corresponding responsibility, the Government must establish that:
(1) the Respondent dispensed a controlled substance; (2) a red flag
was or should have been recognized at or before the time the
controlled substance was dispensed; and (3) the question created by
the red flag was not resolved conclusively prior to the dispensing
of the controlled substance.
[Holiday CVS, LLC d/b/a CVS Pharmacy Nos. 219 and 5195, 77 FR 62,321,
62,316 (DEA 2012)]. The ``steps necessary to resolve the red flag
conclusively will perforce be influenced by the nature of the
circumstances giving rise to the red flag.'' [Id. at 62,341].
It is undisputed that Jones Pharmacy dispensed the controlled
substances at issue in this proceeding, for the Respondent stipulated
to dispensing the aforementioned prescriptions. [FOF 1-61; ALJ Exh.
21]. Further, during the presentation of its case, the Government
presented credible evidence that ``red flags'' were present in the
prescriptions at issue in this matter. [FOF 1-61, 122-130, 132-133].
These ``red flags'' include patients traveling long distances for
filling prescriptions (often traveling from out-of-state),
prescriptions filled for common cocktail medications, short acting pain
medications prescribed without a long acting pain medication,
[[Page 79219]]
prescriptions issued by doctors prescribing outside their scope of
practice, prescriptions dispensed to patients with the same out-of-
state address for the same controlled substances on the same day, and
cash payments. [FOF 122-130; 132-133]. This evidence of the existence
of ``red flags'' within Jones Pharmacy's prescriptions was not rebutted
by the Respondent's expert witness. [FOF 189]. In fact, the
Respondent's expert witness did not opine on any of the prescriptions
at issue in this matter. [FOF 190].
This analysis, therefore, centers on the third prong of the Holiday
CVS test; whether the ``red flags'' presented in Jones Pharmacy's
prescriptions were conclusively resolved prior to the Pharmacy's
dispensing the controlled substances at issue. [See Holiday CVS, 77 FR
at 62,316].
In her testimony, Ms. Jones stated that Jones Pharmacy followed the
policies and procedures that were in place during 2010-2012 with regard
to reviewing prescriptions for issues of concern. [FOF 154]. Those
policies and procedures included only two methods of evaluating the
legitimacy of a prescription: (1) telephoning the prescribing doctor to
ensure that the prescription was authored by the prescribing doctor;
and (2) inquiring about the patient's diagnosis. [FOF 154]. Credible
evidence of these procedures was produced at the hearing in the form of
Jones Pharmacy's original prescriptions--the same prescriptions used as
the basis for the Government's allegations herein. [FOF 154, 175]. This
evidence, however, is not enough to overcome the Government's
allegations because it falls short of fulfilling a pharmacist's
corresponding responsibility.
When reviewing prescriptions from 2010 to 2012, Jones Pharmacy
engaged in a minimal amount of investigation or inspection into the red
flags present on the face of the prescriptions. [FOF 154, 175]. Jones
Pharmacy's only methods of evaluating the legitimacy of a prescription
included talking with the prescribing doctor to ensure that the
prescription was authored by the prescribing doctor, and inquiring
about the patient's diagnosis. [FOF 154]. Jones Pharmacy may have
sought to prevent diversion through its practices, but it only looked
into these two indicators of possible ``red flags'' when a prescription
was presented with multiple others. [FOF 154].
The Government's expert, Dr. Tracy Gordon, credibly testified that
with regard to the ``red flags'' presented in the prescriptions
stipulated to in this proceeding, the ``red flags'' presented were
unresolvable. [FOF 120]. Dr. Gordon testified that there are certain
situations in which red flags can be resolved, but the prescriptions
Jones Pharmacy dispensed contained a multitude of red flags that, when
considered together, could not be conclusively resolved. [FOF 121-124,
126-130, 132-133]. For example, patients B.F. and K.W. presented
identification from Ohio with addresses on the same street. [FOF 122].
B.F. and K.W. saw the same doctor, and were prescribed common cocktail
medications. [FOF 1-6, 122]. Dr. Gordon testified that there was
nothing Jones Pharmacy could have done to resolve these red flags when
presented together. [FOF 122]. Therefore, I conclude that Jones
Pharmacy dispensed controlled substances prescriptions with unresolved
red flags.
Similar to this, in Holiday CVS, the Administrator rejected the
Respondent's contention that ```no case law, no Administrator decision,
and no published DEA guidance supports [the Government Expert's] claims
that certain red flags are `unresolveable' on their face.''' [77 FR at
62,317]. Instead, the Administrator held that ``if the red flags
presented by a prescription could not be resolved conclusively so as to
permit a lawful dispensing, then the Government satisfied the third
element of its prima facie burden.'' [Id. at 62,322].
Following Holiday CVS, I have a duty to view the evidence presented
in this matter and determine whether or not Jones Pharmacy conclusively
resolved the red flags presented by a prescription prior to dispensing
it. [Holiday CVS, 77 FR at 62,322]. As stated above, Dr. Gordon
testified the red flags presented in Jones Pharmacy's prescriptions
were unresolvable. [FOF 120, 122-124, 126-130, 132-134]. The
Respondents did not put on any evidence rebutting specific red flags
present in the prescriptions at issue. [FOF 190]. Rather, the
Respondents expert only offered opinions regarding what red flags were
generally known during 2010-2012. [FOF 184-186].
Thus, the testimony of Dr. Gordon was not contradicted to the
extent that it demonstrated Jones Pharmacy filled prescriptions with
unresolvable red flags presented from 2010-2012. Due to this, I
conclude that Jones Pharmacy did not conclusively resolve the red flags
inherent in its prescriptions prior to dispensing. I therefore find
that factors two and four weigh in favor of revocation.
c. Additional Indicators of Diversion
Besides the red flags discussed above, the record manifests
additional indicators that Jones Pharmacy may have dispensed controlled
substances unlawfully. Specifically, the record indicates that Jones
Pharmacy's business, from 2010--2012, was largely comprised of
controlled substances sales. [FOF 96, 97 (explaining that 89% of all
the controlled substance prescriptions filled by Jones were for
cocktail drugs, roughly half of which were dispensed to out of state
customers, 99% of the controlled substances were for immediate release
pain medications, and 93% of the prescriptions dispensed were for cash
paying customers)]. These statistics are unusually high compared to
national averages. [FOF 70-72, 117; see also East Main Street Pharmacy,
75 FR 66,149, 66,153 (DEA 2010) (noting that the Administrator has
considered percentages of a pharmacy's dispensing practices as compared
to national averages as an indicator of unlawful conduct)].
The record also indicates that the pricing of Jones' controlled
substances was extremely high, and 93% of controlled substance
prescriptions were paid for in cash. [FOF 93, 97]. It is true that a
pharmacy's level of controlled substances sales is not in and of itself
a red flag for diversion or abuse. And it is also true that a pharmacy
can charge the prices it wishes with regard to its controlled
substances. But high prices and copious dispensing of controlled
substances can be an indicator of possible diversion because it
elucidates a customer base willing to pay exorbitant prices for a drug
the customer could otherwise purchase at a nearby pharmacy for much
less. \67\ [FOF 132]. This is especially true when a prescription is
sold at over 1,000 times
[[Page 79220]]
the wholesale cost of the product. [FOF 97].
---------------------------------------------------------------------------
\67\ In its brief the Government cites federal court precedent
that supports the proposition that high prices are an indicator of
unlawful controlled substance dispensing. [Gov't Br. 51 (citing U.S.
v. Fuchs, 467 F.3d 889, 905 (5th Cir 2006) (noting that evidence
that the pharmacy ``charged much higher prices than other
pharmacies'' supported the conclusion that the pharmacist was part
of a criminal conspiracy); U.S. v. Tanner, 61 F.3d 231, 237 (4th
Cir. 1995) (finding evidence that pharmacist ``charged extremely
high prices . . . indicate that [he] was fully cognizant that his
acts were illegal, and that these sales were not mere accidents'');
U.S. v. Hayes, 595 F.2d 258, 261 (5th Cir. 1979) (finding evidence
including ``the prices charged by Hayes support the jury's
conclusion that Hayes also knew that the prescriptions were not
issued for a legitimate medical purpose''); U.S. v. Lovin, 2009 WL
3634194, *7 (S.D. Cal. 2009) (finding ``evidence from which the jury
could infer the defendants knew the substances were distributed for
an other than legitimate medical purpose'' included ``the nature of
the drugs sold and the exorbitant prices charged'')].
---------------------------------------------------------------------------
Finally, the record shows that Jones Pharmacy's profits from 2010-
2012 were almost entirely derived from controlled substances sales.
[FOF 137-139]. Specifically, Jones Pharmacy's annual profits from
dispensing controlled substances in 2010 was $530,483, as opposed to
the profits for non-controlled substances of $10,189. [FOF 137]. Jones
Pharmacy's annual profits from dispensing controlled substances in 2011
was $439,990, as opposed to the profits for non-controlled substances
of $38,241. [FOF 138]. Jones Pharmacy's annual profits from dispensing
controlled substances in 2012 was $316,942, as opposed to the profits
for non-controlled substances of $58,123. [FOF 139]. The total amount
of gross profits Jones Pharmacy made from the sales of schedule II
narcotics during this three year period, 2010-2012, was in excess of
$1.2 million. [FOF 72]. While I note the downward trend in profits
derived from controlled substances for the years 2010, 2011, and 2012,
Jones Pharmacy's amount of profits from controlled substance sales as
compared to non-controlled substances is exorbitantly high. [FOF 117].
These statistics, coupled with the fact that 93% of controlled
substances sales were paid for in cash, [FOF 97], indicate that Jones
Pharmacy was dispensing controlled substances in the face of red flags
for the sake of reaping lucrative cash profits. [FOF 70, 72].
d. Jones Pharmacy's Knowledge of Red Flags
As an attempt to defend its dispensing actions and profit margins,
the Respondents put on evidence purporting to show that Ms. Jones,
along with the general pharmacy community, was unaware of the term or
concept of ``red flags'' from 2010-2012. [FOF 173, 186; see also
Holiday CVS, 77 FR at 62,316 (holding that ``Agency precedent limits [a
registrant's] corresponding responsibility to circumstances which are
known or should have been known.'' (internal citations omitted))]. As
support, the Respondents argue that Ms. Jones was simply na[iuml]ve;
she did not know or have reason to know that the prescriptions at Jones
Pharmacy were not written for a legitimate medical purpose because the
term or concept ``red flags'' was not generally known in the Florida
pharmacy community from 2010-2012.\68\ [FOF 185, 198]. For the reasons
listed below, I find that this defense fails, and Ms. Horn's expert
testimony as it relates to Florida pharmacists' knowledge of the term
or concept of ``red flags'' from 2010-2012 is not persuasive.
---------------------------------------------------------------------------
\68\ While Ms. Horn testified that the first time she heard of
the term ``red flags'' was in 2014, the term or concept ``red
flags'' has long been recognized as a reflection of the norms of the
pharmacy profession. [Holiday CVS, 77 FR at 62,319 (noting that the
``red flag'' standard is what pharmacists are ``taught in
schools''); East Main Street, 75 FR 66,149, 66,157 (DEA 2010) (``a
pharmacist is `absolutely' taught to question the legality of a
prescription'' such as ``a combination of a narcotic, a
benzodiazepine, a muscle relaxant, and a sleeping pill'' with
similar doses for everybody, [with] no individualization of
therapy''); Gov't Br. 61]. Thus Ms. Jones' personal knowledge of the
term ``red flags'' is not the focus here. The focus here is Ms.
Jones' professional judgement when dispensing prescriptions that
presented suspicious indicators such as the ``red flags'' discussed
herein. [FOF 67].
---------------------------------------------------------------------------
First, the Respondents aver that ``Ms. Jones complied with her
corresponding responsibility as she understood it at the time by taking
the actions that she took to check the validity of the prescriptions.''
[Resp. Br. 32; FOF 135]. At the hearing, Ms. Jones testified that she
was na[iuml]ve, and did not know about ``red flags'' for abuse or
diversion until May 2014. Specifically, Ms. Jones stated that ``we may
have made mistakes that people may call dumb, na[iuml]ve, stupid, but
it was not our intent to put stuff in the hand[s] of other people.''
[FOF 135].
In its brief, the Government challenges the sincerity of the anti-
diversion ethos Ms. Jones declared at the hearing by pointing out
inconsistencies in Ms. Jones's testimony and the Respondents'
documentary evidence. The Government first points to high prices Ms.
Jones charged and the cash profits Ms. Jones made to show that she
``was fully cognizant that [her] acts were illegal'' and ``not mere
accidents.'' [Gov't Br. 53]. Next, the Government notes a gaping
inconsistency in Ms. Jones testimony which I find particularly
persuasive in assessing Ms. Jones credibility. [Gov't Br. 55-56].
In defending an assertion made by Florida Department of Health
Inspector Crane--that a person could notice from Jones Pharmacy's
parking lot that the pharmacy catered to pill seekers because of its
``loitering'' clientele--Ms. Jones stated:
The people [Ms. Crane] considered loitering were people that
lived in the area. They were usually older gentlemen that sat
outside of some of the businesses. There was a barber shop . . .
There was a Haitian restaurant. There was a Hatian market. There was
also a tax office . . . I don't think loitering was an appropriate
term. They were actually people, I considered the pharmacy to be a
part of the community, because they were people who made sure if I
was walking in by myself, they would say are you okay? Good Morning.
How are you? I felt like they looked out for me, so I don't feel
like they were loitering.
[Tr. 415]. But in her letters to her congressional representatives
urging action on behalf of the DEA to change her pharmacy's address,
Ms. Jones stated that she was ```lucky' to move her business to a
`better environment' where she could `go in the parking lot and not
worry about smelling urine or seeing people hanging out on the
sidewalk.''' [FOF 146]. This inconsistency, while seemingly trivial,
calls into question the credibility of Ms. Jones' assertion that it was
never Jones Pharmacy's intent to divert controlled substances because
this statement purports that Ms. Jones was cognizant of the loitering,
(possibly pill seeking) clientele outside her store. [FOF 69, 146].
Second, the testimony of Respondent's Expert, Ms. Donna Horn, is
not credible as it relates to the general knowledge of Florida
pharmacists from 2010-2012. Ms. Horn has a multitude of experience in
the prevention of prescription filling errors. [FOF 181]. When Ms. Horn
was the President of the National Association of Board of Pharmacies,
she prioritized a ``platform'' of ``reducing medication errors.'' [FOF
181]. In contrast to her vast prevention of filling error experience,
however, Ms. Horn indicated that she has not conducted any research on
a pharmacist's corresponding responsibility. [FOF 190]. Ms. Horn also
indicated that she has not published any research on corresponding
responsibility issues. [FOF 190]. Further, Ms. Horn stated that she
last practiced pharmacy as a pharmacist filling prescriptions fifteen
years ago, and has never practiced as a pharmacist filling
prescriptions in Florida, for she is only licensed as a pharmacist in
Massachusetts [FOF 181].
When asked about the basis for her knowledge with regard to
pharmacists' general knowledge of ``red flags,'' Ms. Horn indicated
that she looked at some of the administrative opinions on the DEA's
website in forming her opinions. [FOF 185]. But as counsel for the
Government rightly pointed out, Ms. Horn's opinions about what was
``generally known among pharmacists based on DEA publications--
contradicts the only source she claimed to consult.'' [Gov't Br. 63].
For example, Ms. Horn testified that in 2010, a combination of a
benzodiazepine, a narcotic, and a carisoprodol was not a sign of drug
abuse. Yet in one of the 2010 decisions that Ms. Horn claimed to
review, East Main Street Pharmacy, the Administrator held that ``the
[[Page 79221]]
combination of a benzodiazepine, a narcotic and carisoprodol is `well
known in the pharmacy profession' as being used `by patients abusing
prescription drugs.''' [75 FR at 66,149)]. Likewise, the Government
lists five such examples in its brief where Ms. Horn's opinion--
concerning what was generally known in the pharmacy community about a
pharmacist's corresponding responsibility--stands in stark contrast to
the administrative decision she purportedly used to form the basis of
that very opinion. [Gov't Br. 63]. As such, I am not persuaded by Ms.
Horn's testimony regarding what was generally known of ``red flags'' in
the Pharmacy community from 2010-2012.
I therefore conclude that the concept of red flags has long been
recognized as a reflection of the norms of the pharmacy profession, and
Jones Pharmacy's purported ignorance is not a credible defense.
[Holiday CVS, 77 FR at 62, 319 (noting that DEA has held that the ``red
flag'' standard is what pharmacists are ``taught in schools'' (Holiday
CVS, 77 FR at 62,319), and that ``a pharmacist is `absolutely' taught
to question the legality of a prescription'' such as ``a combination of
a narcotic, a benzodiazepine, a muscle relaxant, and a sleeping pill''
with similar doses for everybody, [with] no individualization of
therapy.'' East Main Street, 75 FR at 66,149)]. The Government,
therefore, has met its burden of proof in this matter.
e. Mitigating Evidence
Thus, because the Government has established its prima facie case,
the burden of production now shifts to the Respondents to demonstrate
that they take full responsibility for their unlawful conduct and they
have put in place remedial measures so that such violations will not
happen in the future. [Medicine Shoppe-Jonesborough, 73 FR 364, 387
(DEA 2008) (quoting Samuel S. Jackson, 72 FR 23,848, 23,853 (DEA 2007))
(holding that a registrant must ``present sufficient mitigating
evidence to assure the Administrator that [it] can be entrusted with
the responsibility carried by such a registration''); Leo R. Miller, 53
FR 21,931, 21,932 (DEA 1988)]. And because ``past performance is the
best predictor of future performance,'' [ALRA Labs., Inc., v. DEA, 54
F.3d 450, 452 (7th Cir. 1995)], ``this Agency has repeatedly held that
where a registrant has committed acts inconsistent with the public
interest, the registrant must both accept responsibility for its
actions and demonstrate that it will not engage in future misconduct.''
[Holiday CVS, 77 FR at 62,323 citing Medicine Shoppe-Jonesborough, 73
FR at 387; see also Jackson, 72 FR at 23,853; John H. Kennedy, 71 FR
35,705, 35,709 (DEA 2006); Prince George Daniels, 60 FR 62,884, 62,887
(DEA 1995)]. Once a respondent has accepted responsibility for her
actions, she may ``demonstrate what corrective measures she has
undertaken to prevent the re-occurrence of similar acts.'' [Hassman, 75
FR at 8194 citing Jayam Krishna-Iyer, 74 FR 459, 464 & n.8 (2009)].
As stated above, a registrant's acceptance of responsibility must
be unequivocal. In her testimony, Ms. Jones repeatedly stated that she
``could have done more'' when ensuring a prescription was issued for a
legitimate medical purpose. [FOF 136 & fn. 21]. But as the Government
rightly states in its brief, ``[a] registrant cannot accept
responsibility for past misconduct without first understanding those
responsibilities.'' [Gov't Br 72].
Ms. Jones testified that the procedures she followed in 2010 were
procedures she learned from her experience at other pharmacies. [FOF
152-154]. With regard to the prescriptions at issue in this proceeding,
and Jones Pharmacy's prescribing practices in 2010-2012, Ms. Jones
stated repeatedly that she should have done things differently; that
she could have, and should have, done things much different.\69\ [FOF
125, 131, 135, 136 and n.19]. Then when asked on cross-examination
about her responsibilities to ensure prescriptions were issued for a
legitimate medical purpose, Ms. Jones said she thought she was
exercising her responsibility because she was dispensing in accordance
with her prior experience. [FOF 136 & fn. 19].\70\
---------------------------------------------------------------------------
\69\ In MacKay v. DEA, 664 F.3d 808, 820 (10th Cir. 2011) the
U.S. Court of Appeals for the Tenth Circuit addressed the
Administrator's consideration of a practitioner's purported
acceptance of responsibility. The Court held:
[t]he DEA may properly consider whether a physician admits
fault in determining if the physician's registration should be
revoked. When faced with evidence that a doctor has a history of
distributing controlled substances unlawfully, it is reasonable for
the . . . Administrator to consider whether that doctor will change
his or her behavior in the future. And that consideration is vital
to whether the continued registration is in the public interest. . .
. [T]he . . . Administrator had no evidence that Dr. MacKay
recognized the extent of his misconduct and was prepared to remedy
his prescribing practices.
Id. See also Chein v. DEA, 533 F.3d 828, 837 (D.C. Cir. 2007)
(upholding revocation order, noting in part that the physician had
not ``accepted responsibility for his misconduct''); Hoxie, 419 F.3d
at 483 (DEA properly considers admission of fault in determining
whether a registration should be revoked).
\70\ Ms. Jones carefully avoided any admission that she failed
to exercise her corresponding responsibility.
Q: When you filled those prescriptions on April 19 and 20 of
2010, were you exercising your responsibility to insure they were
issued for legitimate medical purposes?
A: I think I was at the time, yes.
Q: It's fair to say you fulfilled the responsibilities as you
understood them at the time, correct?
A: Correct.
Q: And you understand those responsibilities differently today,
correct?
A: Differently today--differently in the sense of I can do more;
differently, no, in the sense if the prescription is written by the
prescriber, I don't think it makes it an illegitimate, not a
legitimate prescription for medical purposes. I think I can do more
digging to make sure that the patient is going to use it
appropriately and not make it so that somebody else has access to it
. . . But I still do rely on the prescriber to write prescriptions
for legitimate medical purposes. [Tr. 599-600].
---------------------------------------------------------------------------
I agree with the Government that the issue with these statements is
that they ``place [Ms. Jones] in the role of a third party bystander to
wrongdoing.'' [Gov't Br. 72]. Ms. Jones asserts that the practices and
procedures she employed were those she utilized at other pharmacies.
[FOF 154]. These statements do not act to ``unequivocally'' accept
responsibility for Ms. Jones' actions. To the contrary, these
statements shift the blame to prior pharmacies that Ms. Jones worked
for.
Next, the Government rightly notes that Ms. Jones places
culpability of her actions on the ``professed confusion about legal
responsibilities.'' [Gov't Br. 72]. And Ms. Jones' wavering responses
on cross examination undoubtedly show her lack of understanding of a
pharmacist's corresponding responsibility. For example, when asked
whether or not there are circumstances that would cause Ms. Jones to
reject a prescription because she believed it was not issued for a
legitimate medical purpose, Ms. Jones stated ``there are circumstances
that would cause me to reject a prescription. I don't think I can make
the determination whether it's for a legitimate medical purposes
because I would have to say that I'm in that person's body and I know
how they feel if we're speaking just about pain medications.'' [FOF
135]. Then when asked whether she knew one way or another if she had a
corresponding responsibility, Ms. Jones stated ``I did not know that
the law said that I had to make sure that prescriptions said it was
legitimate, medically legitimate.'' [FOF 135].
In Sigrid Sanchez, M.D., the Administrator considered a similar
situation where a practitioner averred--in the face of wrongful
prescribing allegations--that it ```was the first time in [her]
professional career that [she] had been a dispensing practitioner,' and
that she `was completely unaware that [she] had run afoul of the laws
[[Page 79222]]
governing dispensing practitioners.''' 78 FR 39, 331, 39,333 (DEA
2013). Assessing these claims, the Administrator stated ``[o]ne must
wonder why [the practitioner] did not make a similar effort to
familiarize herself with the various requirements applicable to the
dispensing of controlled substances under both the CSA and state
laws.'' [Id.]. Considering this, the Administrator held that the
practitioner's purported ``ignorance of law is no excuse.'' [Id.].
The matter at hand is very much the same. Ms. Jones claimed that
she was following her corresponding responsibility as she understood it
from 2010-2012 when over a hundred prescriptions that were presented
with multiple unresolved red flags were dispensed at Jones Pharmacy.
Ms. Jones purported to accept responsibility for Jones Pharmacy's
dispensing practices by repeatedly asserting that she did what she knew
at the time, but now she knows she could have done more. [FOF 136 & fn.
19]. But then Ms. Jones demonstrated by her statements that she does
not fully understand her corresponding responsibility even yet today.
[FOF 135]. Thus, there remains no excuse for the Respondents' past
dispensing conduct and continued lack of knowledge of Jones Pharmacy's
corresponding responsibility to ensure that controlled substances
dispensed reach only patients with legitimate medical needs. [See 21
CFR Sec. 1306.04(a)].
I agree with the Government that as such, the Respondents'
``[c]laims of reliance on others [and] professed confusions about legal
responsibilities demonstrate precisely the opposite of acceptance of
responsibility.'' [Gov't Br. 72]. For these reasons, I conclude that
Ms. Jones has not accepted responsibility for the unlawful dispensing
that occurred at Jones Pharmacy from 2010-2012.
Because I find that Ms. Jones has not unequivocally accepted
responsibility for the dispensing of prescriptions with red flags
present from 2010-2012, I will not consider the remedial efforts that
the Respondents put forth in their case in chief. [See Holiday CVS,
LLC, 77 FR at 62,346 (explaining that a registrant's acceptance of
responsibility and showing of remedial measures are independent
``essential requirements for rebutting the Government's prima facie
showing that continuing an existing registration would be `consistent
with the public interest.''' 21 U.S.C. 823(f); see also Hassman, 75 FR
at 8194 citing Jayam Krishna-Iyer, 74 FR at 464 & n.8. and The Medicine
Shoppe, 79 FR 59,504, 59,510 (DEA 2014) (holding that there is no need
to address a Respondent's remedial measures when the respondent has not
accepted responsibility for its misconduct).
3. Basis for Denial of SND Healthcare LLC's Application for a DEA
Registration
Even though Jones Pharmacy and SND Healthcare are separate
entities, they are treated as one integrated enterprise for purposes of
this proceeding. In MB Wholesale, Inc., 72 FR 71,956, 71,958 (DEA
2007), the Deputy Administrator denied an application by one business
entity for a DEA Certificate of Registration as being inconsistent with
the public interest, 21 U.S.C. 823(f), based on a separate, related
business entity's dispensing conduct where the two were ``nominally
separate business entities.'' [Id.]. The Deputy Administrator clarified
that the Agency will treat two separately organized business entities
as one integrated enterprise under the Controlled Substances Act where
it is appropriate to do so based on the overlap of ownership,
management, and operations of the two entities.'' [72 FR at 71,958].
In this instance, there is no dispute that SND Healthcare and Jones
Pharmacy are one integrated enterprise. Ms. Jones is the owner and
operator of both Jones Pharmacy, and SND Healthcare. Jones Total Health
Pharmacy, LLC, and SND Healthcare LLC, are both incorporated in the
state of Delaware. [FOF 144]. The corporate documents produced in this
proceeding show that Ms. Jones is the owner for both business entities.
[FOF 144]. The corporate documents also reveal that Ms. Jones is the
Registered Agent, the Florida Community Pharmacy Permit applicant,
managing member, and authorized representative who submitted the
Applications By Foreign Limited Liability Company For Authorization To
Transact Business in Florida for both business entities. [FOF 144]. In
light of this, I find that it is proper to consider Jones Total
Healthcare, LLC, and SND Healthcare, LLC, as one integrated enterprise
under the Controlled Substances Act because the ownership, management,
and operations of each entity are sufficiently similar.
By virtue of this finding, and because Agency has held that past
performance is the best predictor of future performance, [Alra Labs. v.
DEA, 54 F.3d 450, 452 (7th Cir. 1995)], I conclude that the unlawful
dispensing practices at Jones Total Health Pharmacy, LLC, are an
appropriate basis to deny the pending application for SND Healthcare,
LLC's DEA Certificate of Registration.
VI. Conclusions and Recommendation
Given the egregious dispensing practices that took place at Jones
Pharmacy from 2010-2012, I recommend that the Respondents' Certificate
of Registration for Jones Pharmacy be revoked, and any applications for
modification or renewal be denied. Further, for the same reasons
described herein, I recommend that the pending Certificate of
Registration application for SND Healthcare be denied.\71\
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\71\ There is no evidence in this record under Factors Three and
Five that would mitigate the conduct that is inconsistent with the
public interest under Factors Two and Four. I therefore conclude
that the absence of such evidence ``militates neither for nor
against the revocation sought by the Government.'' Top Rx Pharmacy,
78 FR 26,069, 26,081 (2013).
Dated: April 29, 2015
Gail A. Randall,
Administrative Law Judge.
[FR Doc. 2016-27120 Filed 11-9-16; 8:45 am]
BILLING CODE 4410-09-P